India's Massive Employment Linked Incentive Scheme Approved, Targets 3.5 Crore Jobs
The Indian government has approved a massive Employment Linked Incentive Scheme, allocating 99,446 crore Rupees to boost employment and social security. The scheme, approved by the Union Cabinet led by Prime Minister Narendra Modi, aims to create over 3.5 crore jobs in the next two years.
The scheme consists of two parts. Part A offers a one-time incentive of up to Rs 15,000 to approximately 1.92 crore first-time employees registered with EPFO. This incentive is distributed in two tranches after six months and a year of service, provided the employee completes a financial literacy course. Part B, on the other hand, offers monthly incentives ranging from Rs 1,000 to Rs 3,000 per additional employee to employers, with a focus on manufacturing. These incentives are provided for two years, with an extended benefit period of four years for manufacturing jobs. Employers must maintain a net increase in employment for at least six months to qualify for these incentives.
The ELI Scheme aims to tackle multiple policy objectives. It seeks to improve youth employability, foster savings habits, reduce informal employment, and bolster labor-intensive industries. Incentives will be disbursed via the Aadhaar-linked Direct Benefit Transfer (DBT) system for employees and directly to employers' PAN-linked bank accounts.
With a budget of Rs 99,446 crore, the Employment Linked Incentive Scheme is set to create over 3.5 crore jobs between August 2025 and July 2027. The scheme is designed to benefit both employees and employers, with a particular focus on the manufacturing sector. It is hoped that this initiative will significantly contribute to India's employment landscape.
