New Delhi, July 1: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the Employment Linked Incentive (ELI) Scheme, with an outlay of Rs 1 lakh crore aimed at creating 3.5 crore additional jobs in the next two years.

The scheme will support employment generation, enhance employability and social security across all sectors, with special focus on the manufacturing sector. 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 of two years for generating additional employment, with extended benefits for another two years in the manufacturing sector.

The ELI Scheme was announced in the Union Budget 2024-25 as part of the Prime Minister’s package of five schemes to facilitate employment, skilling and other opportunities for 4.1 crore youth with a total budget outlay of Rs 2 lakh crore.

With an outlay of Rs 99,446 crore, the ELI Scheme aims to incentivise the creation of more than 3.5 crore jobs in the country over a period of 2 years. Out of these, 1.92 crore beneficiaries will be first timers, entering the workforce. The benefits of the scheme would be applicable to jobs created between August 1, 2025 and July 31, 2027, according to an official statement.

The Scheme consists of two parts, with Part A focused on first timers and Part B focused on employers:

Targeting first-time employees registered with EPFO, this part will offer a one-month EPF wage up to Rs 15,000 in two instalments. Employees with salaries up to Rs 1 lakh will be eligible. The first instalment will be payable after 6 months of service, and the second instalment 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a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.

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

The Part B support to employers will cover the generation of additional employment in all sectors, with a special focus on the manufacturing sector. The employers will get incentives in respect to employees with salaries up to Rs 1 lakh. The government will incentivise employers, up to Rs 3,000 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 3rd and 4th years as well.

Establishments, which are registered with the 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.

The incentive structure will be as under for the EPF wage slab of Rs 10,000 of an additional employee, the employer will get Rs 1,000 as an incentive. For a wage slab of Rs 10,000 to Rs 20,000, the incentive for the employer will will be 2,000 per employee while for an employee in a wage slab above Rs 20,000 and up to salary of Rs 1 lakh, the incentive will go up to Rs 3,000.

This part is expected to incentivise employers for the creation of additional employment of nearly 2.60 crore persons.

All payments to the first-time employees under Part A of the Scheme will be made through the DBT (Direct Benefit Transfer) mode using the Aadhaar Bridge Payment System. Payments to the employers under Part B will be made directly into their PAN-linked accounts, the statement added. (IANS)

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