India may have added nearly 800,000 people to its formal workforce in the April-June quarter, including half a million in June alone, driven by expert services comprising private security agencies, small contractors and manpower agencies.
Figures gleaned from the Employees’ Provident Fund Organization (EPFO) show that these payroll additions are being made in poorly paid jobs even as most parts of the formal sector are yet to recover. Good jobs in manufacturing, financial establishments and core engineering firms are far from making a recovery.
For example, on the one hand, nearly a quarter of a million 18-25-year-olds—considered freshers in the labour market—joined expert services payrolls in April-June. On the other, there were 9,000 payroll additions in trading and commercial establishments, 16,000 in core engineering and a mere 649 in financial establishments in the same quarter, according to payroll data at EPFO. The situation is almost identical across verticals and age groups. For example, in June, expert services accounted for 345,500—or 65%—of the nearly 530,000 payroll additions among all age groups in the top 10 industry segments.
These segments include computer and hardware, engineering, trading and commercial establishments, financials, building and construction, textiles and hospitals. Expert services are considered separately from other jobs for provident fund accounting. “The recovery across industries is yet to happen. The MSME (micro, small and medium enterprises) sector is still in turmoil. The recovery that you see is largely driven by the expert service payroll additions. And they are largely not considered decent jobs. A segment of them may have decent jobs, but a large portion of the expert services payroll additions is low-paid jobs,” said a government official who declined to be named.