NPS adoption by govt sector at 6-month high in September: NSO data
25/11/2023
new delhi, nov 24: Adoption of the National Pension System (NPS) by employees of central and state governments rose for the third consecutive month to a six-month high in September, signalling accelerated fresh formal hirings in the public sector.
The latest NPS data released by the National Statistical Office (NSO) on Friday showed that the number of new monthly subscribers under the central and state government components of the NPS collectively increased by 7.8 per cent to 61,897 in September from 57,399 in August.
Earlier, 85,586 new subscribers had joined the NPS in March.
The Centre has mandated the NPS for all its new employees. So, analysts believe the monthly subscription figures are a proxy for new employment generation by the central government.
Under the central component, 18,937 new subscribers joined the NPS in September compared to 17,092 in August.
Meanwhile, 42,960 new subscribers joined the NPS in September under the state component, up from 40,307 in August. However, since a few Opposition-ruled states like Rajasthan, Chhattisgarh, Himachal Pradesh, Jharkhand, and Punjab, had announced a return to the Old Pension Scheme (OPS), thereby abandoning NPS, it cannot be used as an exact metric to gauge hirings at the state level.
Of the total new subscribers at both the state and centre, the share of young subscribers belonging to the 18-28 age group, increased to 47.3 per cent (29,333) from 43.3 per cent in August (24,835).
This is crucial because people belonging to this age group are first timers in the job market and thus reflects the robustness of the job market.
However, the increase in new NPS subscribers at the government level in September comes in the wake of the decline seen in the formal employment during the same month under the Employees’ Provident Fund (EPF), as the number of new EPF subscribers fell to a six-month low of 891,583 in September from 953,092 in August.
“While recruitments are happening at the government level, they only reflect a very marginal portion of the total workforce in the country.
The decline seen in formal and wage employment, as reflected in the 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,” says Santosh Mehrotra, visiting professor, University of Bath.
Meanwhile, the number of new subscribers under the corporate component declined by 17.4 per cent to 11,421 in September from 13,829 in August. This comprises either voluntary subscribers or mainly employees of central and state public sector undertakings along with those in the private sector. Managed by the Pension Fund Regulatory and Development Authority (PFRDA), the NPS is designed on a defined contribution basis. Here, both the subscriber and the employer contribute an equal amount to a person’s account.
It was made mandatory for all new central government employees from January 1, 2004, except the armed forces.
Thus, the NPS data can be used as a proxy to gauge the number of new jobs created under the central government.
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