NPS enrolments score a five-month high in August

National Pension System, the project that has been designed to equip working people for financial freedom in retired life, has added new central and state government employees to reach a five-month high figure in August, reports stated. It also indicates that the public sector has started new recruitments.

The data was released by National NPS subscribers Statistical Office (NSO) on October 25. It shows that the number of new monthly subscribers under the central and state government components of the NPS cumulatively shot up by 22% in the month of August. That month it stood at 57,399 in August compared to just 47,039 in July.
This was the highest addition since March this year when 85,586 new subscribers were added to the pension system.
Since the Centre has directed all new employees are put in the NPS, the monthly enrolments can serve as a faithful indicator of the employment generation by the central government.
But the NPS cannot be taken as a correct indicator of the employment by the state governments since some of the states such as Rajasthan, Chhattisgarh, Himachal Pradesh, Jharkhand, and Punjab have migrated to the Old Pension Scheme (OPS).
Under the central government domain, 17,092 new subscribers joined the NPS in August. This was almost 3,000 more than the 14,511 employees being enrolled in July. In August, as many as 40,307 new members to the NPS came from the state governments. This particular sector had 32,528 new enrolments in July.
Despite the overall rise, the percentage of new members in the 18-28-year age group fell from 43.3% in August (24,835) from 44.4% in July (20,892).
However, Mukesh Anand, assistant professor at the National Institute of Public Finance and Policy (NIPFP), has a different take on the situation. He told the media that the rise in new subscribers in August could partially be due to an increase in Tier-II or voluntary accounts under the NPS and not fully due to new jobs being generated. Tier-II or voluntary accounts of the NPS can rise as employees take the benefit of tax rebates and other incentives.
The increase in new members in the month of August took place against the backdrop of a reduction in formal employment in the same month. This was indicated by the fresh monthly EPF additions dropping to a five-month low in August. While the EPF number stood at 10.6 lakh in July, it came down to 925,984 in August.
The private sector employment too painted a gloomy picture in the same period. The new members from the corporate sector came down from 29,333 in July to 13,829 in August.
This sector consists of voluntary subscribers, mainly employees of central and state public sector undertakings and those employed in the private sector.
The NPS is run by the Pension Fund Regulatory and Development Authority. Both the subscriber and the employer contribute an equal amount to an individual’s account.