The Union Cabinet chaired by PM Narendra Modi has approved the Employment Linked Incentive (ELI) Scheme to support employment generation. The Scheme aims to create 3.5 Crore in India in two years with a focus on first-time workers and the manufacturing sector. The total outlay of the scheme is ₹99,446 Crore.
Under the Scheme, while the first-time employees will get one month’s wage (up to Rs 15,000/), the employers will be given incentives for a period to two years for generating additional employment, with extended benefits for another two years for the manufacturing sector.
Key Features of the ELI Scheme:
- Total Job Target: 3.5 crore new jobs across sectors in two years
- First-Time Workers Benefit: One month’s wage up to ₹15,000, in two installments. The 1st installment will be payable after 6 months of service and the 2nd installment will be payable after 12 months of service
- Incentives for Employers or company: Up to ₹3,000/month for each additional employee
- Scheme Period: Jobs created between 1st August 2025 and 31st July 2027
- Formal Workforce Boost: Scheme will increase EPFO-registered employees and ensure social security coverage
The Scheme consists of two parts with Par A focused on first timers and Part B focused on employers:
Part A – Incentive to First Time Employees:
- Targets 1.92 crore first-time EPFO-registered workers
- Offer one-month EPF wage up to Rs 15,000 in two installments:
- 1st installment after 6 months of continued service
- 2nd installment after 12 months + completion of financial literacy program
- To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.
Part B: Support to Employers
This section incentivizes companies to hire more employees, especially in the manufacturing sector.
- Eligibility:
- Employers registered under EPFO
- Employers will get incentives in respect of employees with salaries up to Rs 1 lakh.
- Must hire at least 2 new workers (if under 50 staff) or 5 new workers (if 50+ staff)
- New hires must continue for a minimum of 6 months
- The Government will incentivize employers, up to Rs 3000 per month, for two years, for each additional employee with sustained employment for at least six months.
The incentive structure will be as under:
| EPF Wage Slab of Additional Employee | Monthly Incentive per New hiring Employee to the Employer |
| Up to ₹10,000 | Up to ₹1,000 |
| More than ₹10,000 to ₹20,000 | ₹2,000 |
| More than ₹20,001 to ₹1,00,000 | ₹3,000 |
Employees with EPF wages up to Rs. 10,000 will get a proportional incentive
ELI Scheme Payment Mechanism:
- First-time employees: Incentives paid via Direct Benefit Transfer (DBT) using Aadhaar Bridge Payment System (ABPS)
- Employers: Incentives credited directly into PAN-linked bank accounts
Objective of the ELI Scheme:
The objective of ELI Scheme
- First is to boost Job creation in India
- To Provide Financial Support to fresh entrance into the work
- Encourage formalization of employment and expand EPFO coverage
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