Labour ministry unveils fool-proof plan for ₹1.07 trillion ELI scheme

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Labour ministry has worked out a fool-proof mechanism using digital tools to implement the Rs 1.07-lakh crore Employment Linked Incentive (ELI) scheme, which aims to create 3.5 crore jobs over the next two years.

The scheme, approved by the Union Cabinet on Tuesday, will be implemented through the social security schemes run by retirement fund body EPFO.

Labour Minister Mansukh Mandaviya told reporters that a fool-proof mechanism has been worked out for providing benefits to employees as well as employers under the ELI scheme and benefits will be directly transferred into accounts.

The mechanism has been devised after lesson learnt from the implementation of The Aatmanirbhar Bharat Rozgar Yojana (ABRY) where cases of corruption and fake claims were reported.

The ABRY was launched to incentivize employers for creation of new employment along with social security benefits and restoration of loss of employment during COVID-19 pandemic.

The scheme was aimed at reducing the financial burden of the employers of various sectors/industries including MSME and to encourage them to hire more workers.

Under ABRY, the Government of India was bearing both the employees' share (12 per cent of wages) and employers' share (12 per cent of wages) of contribution payable or only the employees' share, depending on employment strength of the EPFO registered establishments.

The scheme commenced from October 1, 2020. The government paid the subsidy for two years from the date of registration.

The ELI scheme is aimed at supporting job generation, enhance employability and social security across all sectors, with special focus on the manufacturing sector.

The scheme aims to incentivise the creation of more than 3.5 crore jobs in the country over two years, an official statement said.

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 for the manufacturing sector.

The ELI scheme was announced in the Union Budget 2024-25 as part of the 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.

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.

The plan consists of two parts, with Part A focused on first timers (employees) and Part B focused on employers.

Targeting first-time employees registered with EPFO, this Part A will offer a one-month 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 after 12 months of service and completion of a financial literacy programme by the employee.