Employment Linked Incentive (ELI) Scheme

On 1 July 2025, the Union Cabinet, led by PM Narendra Modi, approved the Employment Linked Incentive (ELI) Scheme under the Ministry of Labour & Employment, with an outlay of approximately ₹99,446 crore.

• The scheme, announced in the Budget 2024–25, is part of a package aimed at creating employment, skilling opportunities, and social security for 4.1 crore youth.

Key Features

• Part-A: Incentives for First-Time Employees

• Covers first-time EPFO-registered employees earning up to ₹1 lakh/month.
• Provides one month’s EPF wage (max ₹15,000) in two installments: after 6 months of continuous service and after 12 months plus completion of financial literacy training.
• Encourages saving by locking a portion of the incentive for a fixed term.
• Aims to benefit approximately 1.92 crore first-time jobseekers.

• Part-B: Employer Incentives

• Applies across all sectors (special emphasis on manufacturing).
• Employers hiring additional workers (earning up to ₹1 lakh/month) receive support:
  • ₹1,000/month for wages ≤ ₹10,000
  • ₹2,000/month for wages between ₹10,001–20,000
  • ₹3,000/month for wages between ₹20,001–1,00,000
• Support lasts for two years; manufacturing firms receive incentives for up to four years.
• Employers must hire at least two extra employees (if under 50 workforce) or five extra (if 50+ workforce) and maintain them for six months.
• Expected to generate 2.6 crore additional jobs.

• Implementation Mechanism

• Part-A payments via DBT through Aadhaar Bridge Payment System (ABPS).
• Part-B incentives credited directly to employers’ PAN-linked bank accounts.

Significance

• Job Creation & Formalisation: Targets creation of over 3.5 crore jobs, with two crore youth entering the formal sector.
• Youth Employability: Eases entry barriers for first-time jobseekers, coupled with financial literacy training.
• Manufacturing Boost: Extended incentives support job growth in manufacturing, aligning with ‘Make in India’ goals.
• Social Security Expansion: Brings millions under EPFO coverage, enhancing workforce welfare and inclusion.

(Source: PIB)