EPFO Job Growth Falls for 2nd Year to 12.9 Million in FY25

India has seen a steady decline in formal job creation under the Employees' Provident Fund Organisation (EPFO) for two years in a row, according to revised payroll data. In the financial year 2024-25 (FY25), only 12.9 million net formal jobs were added, a small drop from 13.1 million in FY24 and 13.8 million in FY23.

The year FY23 had seen a boost in formal job creation due to the Atmanirbhar Bharat Rojgar Yojana (ABRY), which aimed to support employment recovery after the COVID-19 pandemic.

ECR Registration Drops 6.6% YoY

The number of new businesses registering with EPFO has also fallen. In FY25, 52,309 establishments filed their first Electronic Challan cum Return (ECR), which is 6.6% lower than 56,023 in FY24. FY23 had seen 55,337 such filings.

As per news reports, the decline is mainly due to the "high base effect". In FY23, a large number of jobs were added thanks to the ABRY scheme, making it harder for the following years to match those numbers.

Impact of Atmanirbhar Bharat Rojgar Yojana

The ABRY scheme, launched in October 2020, helped businesses hire more workers by covering a part of their employee provident fund contributions. By March 31, 2024, the government had spent ₹10,188.50 crore under ABRY, benefiting 6.05 million workers across 152,000 establishments. However, this is still less than half the ₹23,000 crore originally allocated for the scheme.

Economic Growth vs. Job Growth

India’s economy grew by 7.6% in FY23, 9.2% in FY24, and 6.5% in FY25, but this growth hasn’t translated into more formal jobs. This has led to widespread concerns among people, as the mismatch between economic growth and job creation is widening.

A New Push with the ELI Scheme

To address the slowdown, the government has introduced the Employment Linked Incentive (ELI) scheme. This aims to encourage the private sector to create more formal jobs, which would help expand the reach of social security to more workers.

Read more: EPFO 3.0 Rollout: Backed By TCS, Infosys And Wipro, What Will Change For Over 8 Crore PF Members.

Conclusion

While India’s economy continues to grow, formal job creation is not keeping up. The fall in EPFO-linked job numbers raises concerns about employment quality and coverage. Schemes like ABRY and the new ELI scheme show the government’s efforts to support job growth, but stronger and more consistent policies may be needed to ensure that economic growth also brings secure jobs for the country’s workforce.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.