Employment Linked Incentive (ELI) Scheme Benefit

ELI scheme is to support employment generation of more than 3.5 crore jobs in two years with an outlay of Rs 1 lakh crore. Scheme focus on manufacturing sector and incentives for first timers. ELI schem aim to create job creation, employability and social security in all sectors. 

Announced as part of the Union Budget 2024–25 under the PM’s five-scheme employment package, the ELI Scheme has a budget outlay of ₹99,446 crore and targets the creation of over 3.5 crore jobs over two years. Of these, 1.92 crore beneficiaries are expected to be first-time entrants into the workforce.

Benifits of Employment Linked Incentive(ELI ) Scheme

• First-time employees will receive a one-time wage support of up to ₹15,000.

• Employers will be incentivized for generating additional jobs over two years, with an extended two-year incentive period for the manufacturing sector.

The scheme covers jobs created between August 1, 2025, and July 31, 2027, and is designed to support youth employment, foster economic growth, and drive labour-intensive sector development.

Part of a ₹2 lakh crore national employment initiative aimed at 4.1 crore youth, the ELI Scheme reflects the government’s broader commitment to building a future-ready workforce and incentivizing large-scale hiring in both traditional and emerging sectors.

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

Targeting first-time employees registered with EPFO, this Part will offer one-month EPF wage up to Rs 15,000 in two installments.  Employees with salaries up to Rs 1 lakh will be eligible.  The 1^st installment will be payable after 6 months of service and the 2^nd installment will be payable after 12 months of service and completion of a financial literacy programme by the employee. 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a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.

The Part A will benefit around 1.92 crore first time employees.

Part B: Support to Employers

This part will cover generation of additional employment in all sectors, with a special focus on the manufacturing sector.  The employers will get incentives in respect of employees with salaries up to Rs 1 lakh.  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.  For the manufacturing sector, incentives will be extended to the 3^rd and 4^th years as well.

Establishments, which are registered with EPFO, will be required to 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.

Advertisment

The incentive structure will be as under:

 *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.

Under the ELI Scheme first-time employees will receive their benefits directly into their bank accounts through the Aadhaar-based Direct Benefit Transfer (DBT) system, ensuring transparency and speed. Employers, on the other hand, will get their incentives credited straight into their PAN-linked bank accounts.

With this scheme government aims to boost job creation across all sectors. Special push for the manufacturing industry. ELI scheme not only supports young people stepping into the workforce for the first time but also plays a vital role in bringing more workers into the formal economy, offering them access to social security benefits and long-term stability.

In essence, the ELI Scheme is about empowering youth, supporting businesses, and strengthening India’s workforce for the future.

Reference:

https://www.pmindia.gov.in/en/news_updates/union-cabinet-approves-employment-linked-incentive-eli-scheme/