Formalisation brings numerous benefits, including increased transparency, improved access to credit and insurance, enhanced social security, and more opportunities for professional growth. It helps combat income inequality, as employees receive better wages, benefits, and protection under labour laws. Formalisation also strengthens overall economic stability and contributes to long-term sustainable growth. Through various government initiatives and rising awareness among employees, the EPFO has become a crucial platform for individuals to secure their financial future. This transformation towards a formal economy brings significant advantages, fostering stability and prosperity for both employees and the nation as a whole. According to the Economic Survey 2021-22 of the additional workers joining the labour force in 2019-20, close to 90 per cent were engaged in informal employment and more than 98 per cent were in the unorganised sector. About 91 per cent of additional workers were in the unorganised-informal sector. The continuing trends of rising informal employment in both the organised and unorganised sectors call for more efforts by stakeholders to shift the economy towards formalisation. Interestingly, between 2022 and 2023, formal sector employees subscribing to EPFO schemes increased by approximately 13 per cent.
EPFO is a key player in the Indian social security system and provides a range of benefits that help protect workers from the risks of old age, unemployment, and disability. Expanding EPFO’s coverage and ambit across sectors will not only help provide social security to workers but also contribute to the economy’s growth as the government’s focus on formalisation increases.