India set to break record in formal job creation in FY25, but fewer new employers join EPFO: Report

Provisional EPFO data shows that net formal job creation in the first 11 months of 2024-25 has already reached 1.32 crore, surpassing the total 1.31 crore net jobs added in the full fiscal year 2023-24.

With an average monthly addition of 12 lakh, net job creation is expected to exceed 1.45 crore this fiscal, the highest ever, overtaking the previous record of 1.38 crore jobs added in 2022-23.

"An increasing number of workers are now demanding wages in their bank accounts instead of the earlier trend of wages in cash," ET quoted Sougata Roy Choudhury, executive director at the Confederation of Indian Industry (CII), as saying. "This has led to increased formalisation of jobs reflected in the surge in EPFO payroll data."

Despite the impressive job growth, only 45,860 new establishments joined the EPFO till February 2025, one of the lowest additions since 2018-19. If the trend holds, the number may touch just 50,000 for the year, marginally ahead of the pandemic-hit year 2020-21, when 46,656 new establishments were added.

“The dip in number of new establishments coming into the EPFO fold in 2024-25 can be attributed to lack of any fiscal incentive for employers to come into the EPFO fold,” the report quoted a senior government official as saying.

The situation may improve once employment-linked incentive (ELI) schemes announced in July 2024 are implemented, the official added.

EPFO’s latest data for February 2025 showed a net addition of 16.10 lakh members, up 3.99% year-on-year. Of these, 7.39 lakh were new subscribers, largely from the 18–25 age group, highlighting a continuing trend of first-time job seekers entering the formal workforce.

Around 13.18 lakh members rejoined EPFO in February, marking an 11.85% increase from a year earlier. The data also shows growing gender inclusion, with 2.08 lakh new female subscribers joining in February and overall net female payroll additions rising by 9.23% over the year.

Maharashtra led among states with a 20.9% share of the total net additions, followed by Tamil Nadu, Karnataka, Gujarat, Haryana, Delhi, Telangana, and Uttar Pradesh.

The EPFO has been releasing monthly payroll data since April 2018, tracking new joiners, exits, and re-entries to reflect net job creation trends in the formal sector.