New Delhi, July 02: The Union Cabinet, chaired by Prime Minister NarendraModi, has approved the Employment Linked Incentive (ELI) Scheme to promote job creation, enhance employability, and extend social security across all sectors, with a special focus on manufacturing. The scheme, with an outlay of nearly ₹1 lakh crore, aims to generate more than 3.5 crore jobs over the next two years, including 1.92 crore opportunities for first-time job seekers.
Under the scheme, first-time employees registered with the Employees’ Provident Fund Organisation (EPFO) will receive an incentive equivalent to one month’s wage, capped at ₹15,000, disbursed in two installments. The first payment will be made after six months of continuous employment, while the second installment will be released after twelve months, contingent upon the employee’s completion of a financial literacy programme. To encourage saving habits, a portion of this incentive will be held in a fixed deposit that employees can withdraw at a later date.
The scheme also offers substantial incentives to employers for generating additional employment. Registered establishments will be eligible for monthly incentives up to ₹3,000 per new employee, provided the salary is up to ₹1 lakh and the employee remains in continuous service for at least six months. Employers in the manufacturing sector will receive these incentives for up to four years, extending the support beyond the initial two-year period available to other sectors. To qualify, employers with fewer than 50 employees must add at least two new workers, while those with 50 or more employees must increase their workforce by five or more.
Incentive amounts vary based on wage slabs: employees earning up to ₹10,000 will receive a proportional incentive of up to ₹1,000 per month, those earning between ₹10,001 and ₹20,000 will attract ₹2,000, and salaries above ₹20,000 up to ₹1 lakh will qualify for the maximum incentive of ₹3,000 per month.
Payments to first-time employees will be made directly through the Direct Benefit Transfer (DBT) system, using the Aadhaar Bridge Payment System, ensuring timely and transparent disbursement. Employers will receive their incentives directly into their PAN-linked bank accounts.
Announced in the Union Budget 2024-25 as part of a package to support 4.1 crore youth through employment and skill development initiatives, the ELI Scheme not only aims to boost job creation but also seeks to formalize India’s workforce by extending social security benefits to millions of young workers.
