Employment Linked Incentive (ELI) Scheme

Source: PIB

Context: The Union Cabinet approved the Employment Linked Incentive (ELI) Scheme, aiming to create over 3.5 crore jobs and boost formal employment across sectors, especially manufacturing.

About Employment Linked Incentive (ELI) Scheme:

The Employment Linked Incentive (ELI) Scheme is a government initiative launched to promote large-scale formal job creation across all sectors, especially manufacturing.

• Ministry: Ministry of Labour and Employment

• Type: Direct Incentive Scheme to boost employment

• Launched Under: Union Budget 2024–25’s youth skilling and employment package

• Outlay: ₹99,446 crore for 2 years

• Timeline: Covers jobs created between Aug 1, 2025 – July 31, 2027

Key Features of the ELI Scheme

• Part A – For First-Time Employees

• Incentive Amount: One month’s EPF wage (up to ₹15,000) in two instalments. Eligibility: First-time salaried employees (up to ₹1 lakh salary), registered with EPFO. Conditions: 1st instalment after 6 months of continuous service. 2nd instalment after 12 months + financial literacy course. Savings Link: A portion of incentive to be held in a deposit account to promote saving habits. Expected Beneficiaries: ~1.92 crore workers.

• Incentive Amount: One month’s EPF wage (up to ₹15,000) in two instalments.

• Eligibility: First-time salaried employees (up to ₹1 lakh salary), registered with EPFO.

• Conditions: 1st instalment after 6 months of continuous service. 2nd instalment after 12 months + financial literacy course.

• 1st instalment after 6 months of continuous service.

• 2nd instalment after 12 months + financial literacy course.

• Savings Link: A portion of incentive to be held in a deposit account to promote saving habits.

• Expected Beneficiaries: ~1.92 crore workers.

• Part B – For Employers

• Focus: All sectors, with extended support for manufacturing sector. Incentives: ₹1,000–₹3,000/month per new employee for 2 years. Extended Benefit: For manufacturing sector, incentives extended up to 4 years. Eligibility: EPFO-registered firms hiring 2+ employees (if <50) or 5+ (if ≥50). New hires must remain employed for at least 6 months.

• Focus: All sectors, with extended support for manufacturing sector.

• Incentives: ₹1,000–₹3,000/month per new employee for 2 years.

• Extended Benefit: For manufacturing sector, incentives extended up to 4 years.

• Eligibility: EPFO-registered firms hiring 2+ employees (if <50) or 5+ (if ≥50). New hires must remain employed for at least 6 months.

• EPFO-registered firms hiring 2+ employees (if <50) or 5+ (if ≥50).

• New hires must remain employed for at least 6 months.

· EPF Wage Slab | · Incentive to Employer

· Up to ₹10,000 | · Up to ₹1,000

· ₹10,000 – ₹20,000 | · ₹2,000

· ₹20,000 – ₹1,00,000 | · ₹3,000

• Payment Mode: Employees: Via DBT using Aadhaar-based ABPS Employers: Directly into PAN-linked accounts

• Employees: Via DBT using Aadhaar-based ABPS

• Employers: Directly into PAN-linked accounts

• Significance of the Scheme:

• Job Creation Catalyst: Targets 3.5 crore+ jobs, especially for first-time formal workforce entrants.

• Workforce Formalization: Expands social security coverage through EPFO.

• Boost to Manufacturing: Long-term incentives to revive and expand labour-intensive sectors.

• Promotes Savings: Structured wage-based savings incentive for youth.