Indian government’s job statistics are misleading..

Behind the surge in EPFO numbers lies an uncomfortable question: are we measuring new jobs or merely recording existing workers differently?

The Indian government claims that the formal job market in the country is booming. It cites as proof the Employees’ Provident Fund Organisation (EPFO) payroll data.

EPF is a mandatory government-backed retirement savings scheme in India for salaried workers. The question, however, is: does a rising EPFO count really amount to more good jobs?

The official story goes as follows. The Economic Survey 2023–24 reported that net EPFO payroll additions more than doubled, from 6.11 million in FY2018–19 to 13.15 million, and called it “healthy growth in formal employment.” The Union Labour Ministry hailed it promptly as a “growing formal employment landscape.”^[1]

The government has now gone further and linked formalisation of employment directly to “quality jobs”. In August 2026, it promoted the PM Viksit Bharat Rozgar Yojana as a scheme to expand formal employment , designed to encourage first-time employment and to reward employers for creating new formal jobs through EPFO.^[2]

Formalisation is valuable. A worker brought under EPF coverage gains access to an institutional mechanism for retirement savings and social security. An enterprise complying with labour regulations represents progress over one that does not.

However, these claims ignore reality. An EPFO “net subscriber addition” is not a net new job. It can include a person moving from one EPFO-covered employer to another; an existing worker newly brought into EPFO coverage; a worker previously outside formal coverage becoming covered; workers rejoining after an employment break; changes resulting from EPFO administrative coverage; and, importantly, formalisation of an already existing informal job.

The sectoral data make the point. September 2026 EPFO data show contributors in 12 traditionally labour-intensive sectors (garments, textiles, leather, jute, beedi, tea, brick-making, cashew, coir, cotton ginning, diamond cutting and others) fell 1.3%, from 5.536 million in 2023–24 to 5.464 million in 2025–26. These are precisely the sectors India must expand to absorb workers leaving agriculture.^[3]

There is a further fundamental statistical problem.

It is an argument against asking EPFO data to answer a question it was not designed to answer. EPFO payroll statistics measure movements into and out of the EPF system. The monthly payroll series records first-time subscribers, members exiting coverage and earlier members who rejoin. The government itself cautions that the numbers are provisional because employee records are continuously updated.

The Economic Survey 2025–26 carried the government’s claims further: organised manufacturing added 5.7 million jobs. This is potentially more interesting because it is not based on EPFO figures .^[4]

The National Sample Survey or NSS Survey uses Annual Survey of Industries (ASI) data and says organised manufacturing employment increased by more than 5.7 million between FY2015 and FY2024; grew at about 4% compounded annual growth rate (CAGR); and increased by more than one million in FY2024 alone, a 6% year-on-year increase.^[5]

This is probably the strongest official evidence currently being cited, for actual employment expansion in the organised sector, rather than simply formalisation. But there is a major definitional qualification: ASI’s “persons engaged” category includes working proprietors, family members and unpaid workers, as well as employees. So it is not synonymous with regular wage/salaried formal jobs.

The government is also pointing to the rise in regular salaried employment . Regular wage/salaried employment increased from 22.4% of workers in 2024 to 23.6% in 2025. That is a meaningful movement toward wage employment, although it is still very far from the claim that most new employment is formal.^[6]

In fact, what takes the wind out of the government’s claims, is that the increase in organised manufacturing has been accompanied by growing contractualisation. According to ASI, contract workers accounted for only about 13% of the formal manufacturing workforce in 1993-94. However, this share rose sharply to 20% by 1999-2000 and further to 37.8% in 2018-19. As per the latest ASI data (2022-23), it has reached 40.7%. Thus, so much for the claim of formalisation – the ILO defines it as work with social security, and contract work does not offer that. .^[7]

The percentage share of contract labour in capital-intensive industries has increased from 19.5% in 1999-2000 to 46% in 2018-2019, whereas it has increased from 22% in 1999-2000 to 33% in 2018-2019 in labour-intensive enterprises.^[7]

As though that is not enough, if EPFO was really creating so many new jobs, how is it that the PLFS continues to show that India’s share of informal workers (without social insurance, i.e. pensions, death/disability insurance, maternity benefit) was 90% in 2004-5, 90% in 2017-18, and still 90% in 2024.

Job quality also matters: duration, earnings, working conditions, social protection, security of tenure and prospects for advancement. India’s employment challenge has historically been not only unemployment but also underemployment, low productivity and poor-quality work.

The latest PLFS data illustrate this complexity. Even after the increase in regular wage employment, 56.2% of workers in 2025 remained self-employed (mostly own-account and unpaid family labour) and another 20.20% were casual wage labourers. Agriculture still accounted for 43% of employment in 2025 (42% in 2019). The largest addition to the workforce since 2020 has been in agriculture (rising from 200 million to 280 million in 2024).

This matters most for the young. A graduate in a low-paid, insecure job is technically employed but not upwardly mobile. As we estimate in our new book, India Out of Work , real wages for casual and regular workers, and for the 53% of workers who are self-employed, have stagnated for 12 years. If non-farm jobs have grown at half the required rate (12 million a year) for a dozen years the government has been in power, leaving youth unemployment double its 2012 level, from 6% to 12% in 2024, how can real wages rise, however loudly the government touts its low inflation?

The real test of India’s labour market is not how many names enter an EPFO database but whether the economy creates enough stable, productive and decently paid jobs. If it did, the youth (15-29 years) not in education, employment and training, would not have jumped from 50 million in 2012 to 100 million in 2024 . Clearly, many became “discouraged workers” who stopped looking for work.

Santosh Mehrotra is Visiting Professor at Higher School of Economics, Moscow, and former professor of Jawaharlal Nehru University. Kingshuk Sarkar is professor, Goa Institute of Management, Goa.

Originally published under Creative Commons Attribution 4.0 by 360info .^[8][9]