Youth Drives Growth in Social Security Enrolments

Morning Standard

1. Introduction and Context

This editorial by Vismay Basu presents a data-backed analysis of India’s post-pandemic formal employment recovery, emphasizing the rising participation of youth in the organised workforce.

Drawing on data from the Employees’ State Insurance Corporation (ESIC) and the Employees’ Provident Fund Organisation (EPFO) till September 2025, the article argues that India’s economy has regained structural stability and is moving toward greater social security inclusion.

The piece situates this trend within India’s long-term developmental agenda — Atmanirbhar Bharat and Viksit Bharat 2047 — where employment formalisation is viewed not only as an economic but also a social transformation.

2. Key Arguments and Core Discussion

a. Formal Job Recovery and Social Security Expansion

• The article highlights a strong rebound in formal employment:
• ESIC insured employees rose from 2.9 crore (2017–18) to 13 crore (2024–25).
• EPFO net payroll additions increased from 1.55 lakh (2017–18) to 12.9 lakh (2024–25).
• The expansion of insured and pension-covered workers indicates a broader base of labour welfare inclusion.
• The post-pandemic recovery marks a significant comeback from the 2020–21 contraction, showing economic resilience.

b. Youth as the Driving Force

• 70% of EPFO contributors are aged 22–35, reflecting India’s demographic dividend in action.
• The 22–25 age bracket dominates new entries, followed by 18–21-year-olds, showing increasing early-career formalisation.
• Women’s participation, though still around 20%, is gradually improving — signalling progress in gender-inclusive formal employment.

c. Economic Interpretation

• Rising payroll numbers indicate growth of stable, salaried jobs with access to social insurance and pensions — a pillar of middle-class security.
• However, while 16–20 lakh new contributors join monthly, 20–30 lakh exit due to job changes, retirement, or surpassing the ₹21,000 EPFO ceiling.
• This highlights both mobility and volatility within India’s dynamic labour market.

d. Regional and Sectoral Concentration

• Formal employment remains geographically concentrated in industrial and service-oriented states:
  Maharashtra, Gujarat, Karnataka, Tamil Nadu, Haryana, Delhi, and Telangana together account for two-thirds of total EPF enrolments.
• The growth pattern is urban-centric, driven by manufacturing, IT, and logistics sectors, leaving rural employment comparatively underrepresented.

3. Author’s Stance

The author’s stance is analytical, evidence-based, and cautiously optimistic.
He presents the data as a sign of structural recovery in India’s economy while acknowledging underlying challenges — gender imbalance, job exits, and regional disparity.

The tone remains objective and policy-oriented, aiming to inform readers through factual interpretation rather than ideological persuasion.

Basu’s optimism is rooted in data realism — hopeful, but not uncritical.

4. Biases Present

5. Pros and Cons

 Pros

• Empirical Precision: Relies on verified EPFO–ESIC data, enhancing credibility.
• Demographic Focus: Emphasizes youth as a key driver of India’s formal economy.
• Policy Integration: Links employment growth with welfare formalisation and social protection.
• Economic Optimism: Demonstrates India’s resilience despite global slowdown.

 Cons

• Narrow Gender Lens: Mentions participation but lacks deeper feminist economic perspective.
• No Wage Analysis: Focuses on job count, not income growth or job quality.
• Sectoral Skew: Underplays small enterprise and rural employment contributions.
• Policy Disconnect: Fails to directly tie data trends to labour reforms or employment schemes (PMRPY, ABRY, etc.).

6. Policy and Governance Implications

a. Labour Market Reform

• Simplify compliance norms to encourage MSMEs to join the formal system.
• Integrate EPFO and ESIC databases to create a universal social security identity for workers.

b. Youth Employment Policy

• Data validates the need for skill-linked hiring and apprenticeship expansion.
• Strengthen convergence between Skill India, PM Kaushal Vikas Yojana (PMKVY), and Digital India for employability enhancement.

c. Gender Mainstreaming

• Introduce childcare benefits, safe workspaces, and women-centric fiscal incentives.
• Support female employment through flexible hours and hybrid work options.

d. Regional Industrialisation

• Use cluster-based growth to decentralise job opportunities beyond metros.
• Encourage Make in India projects in Tier-2 and Tier-3 cities to ensure equitable employment distribution.

e. Social Security Deepening

• Expand insurance, pensions, and health coverage under a comprehensive national labour welfare architecture.
• Incorporate gig and platform workers into ESIC–EPFO frameworks under new Labour Codes.

7. Real-World Impact

Positive Outcomes:

• Expanding payroll coverage builds economic resilience and household financial security.
• Youth formalisation fosters savings culture, social protection, and consumer stability.

Negative Outcomes:

• Persistent exit rates and limited rural reach risk maintaining informal dominance.
• Rising contractual and gig-based hiring may dilute long-term benefits of formalisation.
• Unequal access to jobs could widen regional and gender divides.

8. Alignment with UPSC GS Papers

9. Conclusion

The editorial convincingly portrays India’s youth-led formalisation wave as a hallmark of economic recovery and structural transformation.
It demonstrates how social security inclusion is gradually redefining the Indian labour market into a more institutionalised, welfare-driven ecosystem.

However, the optimism must be tempered with realism.
Persistent issues — low female representation, urban concentration, and informal job transitions — remind policymakers that formalisation must be inclusive, equitable, and sustainable.

True economic progress lies not merely in creating jobs, but in ensuring that those jobs are secure, dignified, and fairly compensated.

10. Future Perspectives

1. Implement Labour Codes Digitally:
   Establish seamless online compliance and data-sharing between EPFO, ESIC, and state systems.
2. Women’s Workforce Integration:
   Incentivise industries hiring women through tax benefits and safe workplace standards.
3. Universal Social Security:
   Extend ESIC–EPFO to gig, platform, and self-employed workers for nationwide protection.
4. Decentralised Employment Hubs:
   Develop district-level employment zones aligned with local skills and industry needs.
5. Data Transparency & Accountability:
   Create a National Employment Dashboard tracking payroll, wage growth, and job quality metrics.