The Indian Government’s Job Statistics Are Misleading

An EPFO net subscriber addition measures changes in the number of people covered by the Employees’ Provident Fund. It reflects movements into and out of the EPF system. That makes it useful for tracking coverage, but not a direct count of newly created jobs.

One addition might be a worker changing from one EPFO-covered employer to another. It might also represent an existing worker entering coverage for the first time, returning after a break, or moving from informal to formal coverage. Administrative changes can affect the total too.

The government’s payroll series is therefore a formalization measure as much as an employment measure. The monthly figures include first-time subscribers, exiting members, and rejoining members. Because records are continuously updated, the government cautions that the figures are provisional.

The reported increase was dramatic: net EPFO payroll additions more than doubled, from 6.11 million in FY2018-19 to 13.15 million in FY2023-24. The Economic Survey 2023-24 called this healthy growth in formal employment. The Labor Ministry described a growing formal employment landscape.

However, EPFO additions measure changes in coverage, not only newly created jobs. The total can include workers changing employers, rejoining after breaks, entering coverage for the first time, or having existing informal jobs formalized. It can also reflect administrative coverage changes.

The wider labor picture remains highly informal. PLFS data cited in the article show that workers without social insurance made up 90 percent of workers in 2004-05, 2017-18, and 2024. Rising EPFO enrollment has not yet transformed the overall workforce.

Treating rising EPFO enrollment as proof of more good jobs collapses two different ideas: formalization and job creation. Formalization can bring retirement savings and social security, which matters. But an increase in coverage does not show how many genuinely new positions exist or whether those positions provide stable livelihoods.

For example, a worker moving between EPFO-covered employers can raise subscriber additions without increasing total employment. An informal job newly brought under EPF coverage can do the same. Meanwhile, contract workers accounted for 40.7 percent of formal manufacturing workers in 2022-23, up from about 13 percent in 1993-94.

This interpretation can produce overly optimistic policy claims. PLFS still showed 90 percent of workers without social insurance in 2024. Policymakers therefore need measures covering employment growth, earnings, tenure, conditions, and social protection, not payroll enrollment alone.

The Annual Survey of Industries uses the category “persons engaged” to describe people involved in organized manufacturing. This category is broader than regular wage or salaried employment. It is therefore important when interpreting claims about formal job creation.

“Persons engaged” includes working proprietors, family members, unpaid workers, and employees. If the category rose by 5.7 million between FY2015 and FY2024, that does not mean 5.7 million regular formal jobs were created. Some counted workers may not receive wages or hold standard employee positions.

The ASI provides stronger evidence of employment expansion than EPFO payroll data because it measures organized manufacturing activity directly. Still, its definition requires caution. The government’s manufacturing figures should be separated from claims about secure, salaried employment and assessed alongside contract work and social protection.

Contractualization has grown sharply inside India’s formal manufacturing sector. Contract workers made up about 13 percent of the workforce in 1993-94. Their share reached 20 percent by 1999-2000, 37.8 percent in 2018-19, and 40.7 percent in 2022-23.

The increase occurred across different types of industry. In capital-intensive industries, contract labor rose from 19.5 percent in 1999-2000 to 46 percent in 2018-19. In labor-intensive enterprises, it increased from 22 percent to 33 percent over the same period.

These figures qualify claims that formal manufacturing growth automatically means better jobs. The article notes that the ILO defines formalization as work with social security, while contract work does not offer that. More organized-sector employment can therefore coexist with weaker security of tenure and protection.

A broader assessment should ask whether jobs are actually expanding, whether workers receive wages, and whether employment includes social protection. PLFS measures the share of workers without social insurance. Regular wage or salaried employment measures movement toward wage-based work. ASI measures employment in organized manufacturing.

The figures show mixed evidence. Regular salaried employment rose from 22.4 percent of workers in 2024 to 23.6 percent in 2025. ASI reported organized manufacturing employment increasing by more than 5.7 million between FY2015 and FY2024, with more than one million added in FY2024.

Yet PLFS still showed 90 percent of workers without social insurance in 2024. ASI’s “persons engaged” category includes unpaid workers and proprietors. These measures should therefore be read together, alongside contract labor, earnings, working conditions, and security of tenure.

Formal registration is only one part of job quality. A good job also depends on how long it lasts, what it pays, and the conditions under which the work is performed. Social protection is central, including pensions, death or disability insurance, and maternity benefits.

The article contrasts EPF coverage with contractualization. A worker may appear in organized manufacturing or enter the EPFO system while still holding a contract position with weaker security. ASI also counts unpaid workers and family members, showing why an employment statistic may not describe a regular salaried job.

A fuller definition therefore includes earnings, working conditions, social protection, and security of tenure. The article also highlights the need to consider employment duration. Rising payroll enrollment can signal progress, but it cannot establish that most new work is secure, productive, or formal in the broader sense.