Fresh public sector employment declined in 2022 by 8.8%, shows data

After picking up in 2021 from pandemic lows in the preceding year, the number of subscribers under the new pension scheme (NPS) of both the central and state governments, including public sector enterprises, declined 8.8 per cent to 565,500 in 2022.

Since the Centre and states have mandated NPS for all government jobs, analysts believe NPS could be considered a proxy for new employment generation by the public sector. However, a few Opposition-ruled states, including Rajasthan, Chhattisgarh, Himachal Pradesh, Jharkhand, and Punjab, have recently announced a return to the old pension scheme (OPS), thereby abandoning NPS.

Of a total of 118,020 new subscribers that joined NPS in 2022 under the central government, the share of young subscribers (18-28 years) declined to 65.2 per cent, from 67.8 per cent in the preceding year.

However, the share of new female young subscribers increased 2 percentage points to 21.2 per cent of new young subscribers, whereas those of new young male subscribers decreased marginally from 78.9 per cent to 78.6 per cent in the given time frame.

An earlier analysis of the Employees’ Provident Fund Organisation data by Business Standard, however, found that the share of youth in the age group 18-25 in new formal jobs increased to at least a five-year high of 56 per cent in 2022, from 50.9 per cent in 2018.

By comparison, of a total of 447,480 new subscribers that joined NPS under the state governments in 2022, only 33.3 per cent of subscribers belonged to the 18-28-year age group, registering a 2 percentage point increase from the previous year.

The share of young women getting these jobs, however, declined to 35.4 per cent in 2022, from 37.1 per cent in the preceding year, contrary to the trend seen at the Centre.

Managed by the Pension Fund Regulatory and Development Authority, the NPS is designed on a defined contribution basis, wherein both the subscriber and the employer contribute an equal amount to his/her account, was made mandatory for all new central government employees from January 1, 2004, except the armed forces and thus the NPS data can be used as a proxy to gauge the number of new jobs created under the central government.

From April 2018, when the National Statistical Office started releasing the monthly NPS subscriber data in conjunction with the Employees’ Provident Fund payroll and Employees’ State Insurance Scheme data as part of the government’s effort to track formal sector employment, a total of 552,510 new jobs have been created by the central government between 2018 and 2022, of which 65.9 per cent jobs have gone to the youth.

Although a large number of states also adopted NPS, with many states now announcing a reversal to the OPS, it cannot be used as an exact proxy to gauge the total number of new jobs created by all state governments.

Nevertheless, between 2018 and 2022, a total of 2.4 million new jobs were created by states having NPS, of which youth bagged only 856,978 jobs (36.2 per cent).

In 2018, the youth share was 35.6 per cent.

In the Global Employment Trends for Youth 2022 report, the International Labour Organization last year said the pandemic had worsened the numerous labour market challenges facing those aged 15-24 years, with younger ones in this group experiencing a much higher percentage loss in employment than adults since early 2020.