Big Boost for Jobs: Union Cabinet Approves ₹1 Lakh Crore Employment Linked Incentive (ELI) Scheme, India Targets 3.5 Crore Jobs with New Scheme
New Delhi: Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has approved the Employment Linked Incentive (ELI) Scheme to support employment generation, enhance employability and social security across all sectors. With a special focus on India’s of Rs one lakh Crore.
Employment Linked Incentive (ELI) Scheme was announced in the Union Budget 2024–25. It is a part of PM’s package of five schemes to facilitate employment, skilling and other opportunities for 4.1 Crore youth with a total budget outlay of Rs 2 Lakh Crore.
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The Scheme has two parts with Par A focused on first timers and Part B focused on employers:
Part A: Incentive to First Time Employees:
Part A focuses on first-time employees and offers a one-time wage incentive of up to ₹15,000. The incentive will be paid in two installments. The first half of Rs. 7500 is disbursed after six months of continuous employment, and the second installment is released after 12 months and completion of a financial literacy programme by the employee.
Around 1.92 crore first-time employees are expected to get benefits from this initiative scheme.
Part B: Support to Employers:
Part B targets employers by offering monthly incentives of up to ₹3,000 per new employee for two years. This part will cover the generation of additional employment in all sectors, with a special focus on the manufacturing sector. Employers in the manufacturing sector will be eligible for extended benefits for up to four years.
To qualify, establishments must be registered under EPFO and hire at least two additional employees (for employers with less than 50 employees) or five additional employees (for employers with 50 or more employees), on a sustained basis for at least six months.
The incentive structure will be as under:
| EPF Wage Slabs of Additional Employee | Benefit to the Employer (per additional employment per month) |
|---|---|
| Up to Rs 10,000* | Upto Rs 1,000 |
| More than Rs 10,000 and up to Rs 20,000 | Rs 2,000 |
| More than Rs 20,000 (upto salary of Rs 1 Lakh/month) | Rs 3,000 |
*Employees with EPF wages up to Rs. 10,000 will get a proportional incentive.
This part is expected to incentivize employers for the creation of additional employment of nearly 2.60 crore persons.
Incentive Payment Mechanism:
Payments to employees will be made via Direct Benefit Transfer (DBT) using the Aadhaar Bridge Payment System (ABPS). Employer incentives will be credited directly to their PAN-linked accounts.
This scheme is launched to support sustained employment and formalize a larger segment of the workforce by extending social security coverage for crores of young men and women. With ELI Scheme, the government intends to increase job creation in all sectors, particularly in the India’s manufacturing sector, besides incentivizing youth joining the workforce for the first time.
