PM Modi mixes up existing employees with new employment in Zee News interview

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On friday evening, an interview to Zee news PM Modi, messed up mixing study of amnesty scheme and enrolment by EPFO with employment generation.

On January 18th, Bhupender Yadav, the MP and national general secretary of the BJP tweeted, ” Don’t fall for the propaganda: Around 6 lakh jobs are being created in a month in formal sector in the Financial Year 2017-18, reveals first institutional study on jobs based on EPFO and NPS.”

Subsequently, PM Narendra Modi referred to the numbers and the study “authored by SBI group Chief Economic Advisor Soumya Kanti Ghosh and Pulak Ghosh, a professor with the Indian Institute of Management, Bangalore,” who calculated the number of jobs in enterprises from the membership of EPFO, Employees’ State Insurance Corporation, General Provident Fund and National Pension System(NPS).

To debunk claims of jobless growth and job losses due to demonetisation and the GST, Yadav and PM cooked up statements stating that the last one year between 8 to 10 million “new jobs” were created in the formal sector. With always having a twist, as the number of employees or members of EPFO undoubtedly went up by 9-10 million during the year 2017, they were apparently not ‘new’ employees but merely existing employees who were not receiving the benefit of PF and the social security net.

Issuing of notice came up where the EPFO makes it clear that the EPFO actually offered a bail out to defaulting employers by offering an unprecedented amnesty. It is noted that the EPF Act has stringent punishment including penalty, fine and imprisonment for defaulting on payment of PF contributions, whereas EPFO launched a ‘ enrolment scheme’ for employees left out between 2009 April to 2016 December. What is more, the employers were offered amnesty from prosecution following payment of a token one Rupee ‘per annum’ . The circular itself is not clear whether it is one Rupee per year per employer or per employee.

Business Standard in fact quoted the central PF Commissioner V P Joy as saying, “ the EPFO subscriber base might only be showing a formalisation of the workforce, not an addition to the job numbers…as a result of this (our move), workers who earlier were out of the social protection coverage will now get these benefits.”

The scheme offered from three months till March, 2017 and thereafter extended till June last year and from that the EPFO managed to increase the number of employees covered by the organisation and now most of the increase is reported to have come from urban areas such as Mumbai, Delhi and Bengaluru — Mumbai has added the highest number of subscribers, at 1,287,500.

Now the employers have escaped prosecution by this scheme, and it is to be seen whether they continue to contribute to scheme and for how many of their employees and for how long. However, clear is that the study is no proof of employment ‘generation’.

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