The National Pension System (NPS) was adopted by employees of central and state governments for the third consecutive month in September, reaching a six-month high, indicating accelerated new formal hirings in the public sector.
According to the most recent NPS data issued by the National Statistical Office (NSO) on Friday, the number of new monthly subscribers under the central and state government components of the NPS climbed by 7.8 percent in September to 61,897 from 57,399 in August. Previously, in March, 85,586 new subscribers joined the NPS.
The NPS has been mandated by the Centre for all new workers. As a result, economists believe the monthly subscription figures are a barometer for the central government's ability to create new jobs. In September, 18,937 new subscribers joined the NPS under the central component, up from 17,092 in August.
Meanwhile, 42,960 additional subscribers joined the NPS through the state component in September, up from 40,307 in August. However, because a few Opposition-ruled states, including Rajasthan, Chhattisgarh, Himachal Pradesh, Jharkhand, and Punjab, have promised a return to the Old Pension Scheme (OPS), thus abandoning NPS, it cannot be used as an exact yardstick to gauge state hirings.
The share of young members aged 18 to 28 climbed to 47.3 percent (29,333) of total new subscribers at both the state and center, up from 43.3 percent (24,835) in August. This is significant since persons in this age bracket are first-time job seekers, reflecting the job market's resilience.
However, the increase in new NPS subscribers at the government level in September follows a drop in formal employment during the same month under the Employees' Provident Fund (EPF), with the number of new EPF subscribers falling to a six-month low of 891,583 in September, down from 953,092 in August.
"While government recruitments are taking place, they only represent a very small portion of the total workforce in the country." According to Santosh Mehrotra, visiting professor at the University of Bath, "the decline in formal and wage employment, as reflected in EPFO data and the recent Periodic Labour Force Survey (PLFS) data, shows that the job market isn't generating enough jobs for the ever-increasing labour force."
Meanwhile, the number of new corporate subscribers fell 17.4 percent in September, to 11,421 from 13,829 in August. This includes either voluntary subscribers or employees of central and state government agencies, as well as people in the commercial sector.
The NPS is a defined contribution plan managed by the Pension Fund Regulatory and Development Authority (PFRDA). In this case, both the subscriber and the employer make an equal contribution to a person's account. Except for the armed forces, it became mandatory for all new central government employees on January 1, 2004. As a result, the NPS data can be used as a proxy to estimate the number of new employment produced by the federal government.
Since April 2018, the National Statistical Office (NSO) has published employment-related statistics in the formal sector, based on data from the Employees' Provident Fund Scheme, Employees' State Insurance Scheme, and the National Pension System.
