EMPLOYMENT LINKED INCENTIVE (ELI) 

• As per the Ministry of Labour, the Employment Linked Incentive (ELI) scheme aims to support the creation of over 3.5 crore new jobs within a span of two years.
• The Central Government anticipates that approximately 1.92 crore newly hired workers will benefit from the scheme, which will be active from August 1, 2025, to July 31, 2027. The Employees’ Provident Fund Organisation (EPFO) will oversee its implementation.
• Under this scheme, new employees earning up to ₹1 lakh per month will receive an EPF wage benefit of up to ₹15,000 in two parts. The first part will be transferred after six months of continuous employment and the second after completing one year, both paid directly into their bank accounts.
• Additionally, part of the incentive will be placed in a fixed-period deposit account that the employee can access later.
• For employers registered with EPFO, an incentive of up to ₹3,000 per month per new employee will be provided for maintaining employment for at least six months, and this will continue for two years. In the case of manufacturing units, the incentive period will be extended to the third and fourth years

Incentives for First-Time Employees:

• This component of the scheme focuses on individuals entering formal employment for the first time and registered under EPFO. Eligible employees—those earning up to ₹1 lakh per month—will receive an EPF wage benefit equivalent to one month’s salary, capped at ₹15,000, disbursed in two phases.
• The first installment will be given after completing six months of service, while the second will be granted after 12 months, along with successful completion of a financial literacy program. To promote saving habits, a part of the benefit will be placed in a fixed-term deposit account, which the employee can access at a later time.
• Approximately 1.92 crore first-time workers are expected to benefit from this segment of the scheme.

Part B – Employer Incentives:

• This segment provides financial support to employers across all sectors, with particular emphasis on the manufacturing industry.
• Employers hiring workers with salaries up to ₹1 lakh will receive government support of up to ₹3,000 per month for each new hire, provided the employee remains continuously employed for at least six months.
• In the manufacturing sector, this incentive will be extended to cover the third and fourth years as well.
• Eligible establishments must be registered with EPFO and are required to hire at least two additional workers if they employ fewer than 50 people, or five additional workers if their workforce is 50 or more, all on a sustained basis for a minimum of six months

The Employment Linked Incentive (ELI) Scheme holds significant value in India’s efforts to promote inclusive and sustainable job creation. It serves as a strategic intervention to boost formal employment, particularly in the post-pandemic recovery phase. By offering direct benefits to both employees and employers, the scheme addresses multiple socio-economic objectives:

• Job Creation at Scale:
  With a target of generating over 3.5 crore jobs in two years, the ELI Scheme aims to stimulate employment across sectors, especially in the labour-intensive manufacturing industry.

• Encouraging First-Time Employment:
  The scheme provides financial incentives to individuals joining the formal workforce for the first time, making it easier for young jobseekers to find sustainable employment.

• Boosting Formalization:
  By linking benefits to registration under the Employees’ Provident Fund Organisation (EPFO), the scheme encourages the transition from informal to formal employment, extending social security coverage to millions.

• Support for Employers:
  Incentives to employers—up to ₹3,000 per employee per month—reduce the cost of hiring and retaining workers, particularly beneficial for small and medium enterprises (SMEs).

• Focus on Manufacturing Growth:
  With extended incentives for manufacturing units up to four years, the scheme aligns with the government’s broader goals of strengthening the manufacturing sector and achieving self-reliance (Atmanirbhar Bharat).

• Encouraging Financial Literacy and Savings:
  By linking part of the benefits to financial literacy programs and placing a portion in deposit instruments, the scheme promotes responsible financial behaviour among young workers.