Karnataka has added about three million new formal jobs between September 2017 and November 2021.
Those in the 18-21 year age group (10.9 lakh) are the largest chunk, closely followed by the 22-25 year age group (10.5 lakh).
The 2021-22 saw the addition of net new payrolls surpass the pre-pandemic levels of 2019-20, according to the latest Economic Survey, presented by chief minister Basavaraj Bommai in the Assembly. It estimates that Karnataka has formalised about three lakh jobs since September 2017, going by the all India formalisation rate of 10%.
As one of India’s large formal job creating states, Karnataka had 6.2 lakh new subscribers on the employees provident fund (EPF) system in 2018-19. This made up 10% of India’s, and higher than the GDP growth rate of 8.3%.
In 2019-20, the southern state created 8.1 lakh new jobs on the EPF system, staying on course with its 10% plus contribution to national numbers.
The year 2020-21, however, saw a fall to 6.2 lakh new subscribers after the Covid-19 put brakes on new hires. In the current fiscal year, Karnataka has bounced back with 8.3 lakh new subscribers already on-boarded from April to October, making up 11.4% of the national total.
These are formal jobs that provide social security which will become increasingly important as Karnataka’s population ages, says the Economic Survey.
Of particular interest is the ability of India and Karnataka to add formal jobs in the 22-25 age bracket. Every year about 25 million people in India and 1.1 million in Karnataka reach the age of 21. It is necessary to generate formal jobs on a par with the number of youth passing out of universities to sustain a productive workforce. Karnataka, the survey says, is doing well on this score with 12.4% of total national jobs in the 22-25 age bracket in both 2018-19 and 2019-10. In 2021-22, the number has already climbed to 13.4%.
Employee provident fund (EPF) applies to firms with 20 plus employees across 190 industry classifications. It is a reliable indicator since it records new subscribers every month only upon payment of contribution and classifies them by age group, industry, and state, the survey notes.
Business services provider Quess Corp CEO Guruprasad Sreenivasan said many jobs are moving from informal to formal sector, but the pace has to accelerate big time for large sections of population to come out of poverty and get social security cover. This can happen only if governments, both union and states, step up incentives to companies to add more formal jobs to their payrolls.