Cabinet okays ₹99,000 cr employment linked incentive scheme for 35 mn jobs

The Union Cabinet on Tuesday approved the Employment Linked Incentive (ELI) Scheme aimed at supporting job creation, improving employability, and strengthening social security across sectors, with a specific focus on manufacturing.

 

The scheme, which was announced as part of the Union Budget 2024-25, aims to incentivise the generation of over 35 million jobs between August 2025 to July 2027, with a spending of ₹99,446 crore.

 

Of the total beneficiaries, around 19 million employees are expected to be first-time employees entering the formal workforce, according to a Union Cabinet statement.

 

Under the scheme, new employees will receive up to one month’s EPF wage—capped at ₹15,000—in two instalments. “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,” the Centre said.

 

Employers’ benefit 

Under the scheme, employers hiring additional workers will also receive incentives for a period of two years. In the manufacturing sector, this benefit will be extended to four years. To qualify, employers must hire at least two additional employees (for firms with fewer than 50 staff) or five additional employees (for those with 50 or more), who must remain employed for at least six months, the Centre said.

 

Incentives to employers will range from ₹1,000 to ₹3,000 per month per additional employee, depending on the employee’s EPF wage. The government estimates this part of the scheme will help create around 26 million jobs.

 

The government mentioned, “An important outcome of the Scheme will also be formalisation of the country’s workforce by extending social security coverage for crores of young men and women.”