Union Cabinet chaired by Prime Minister approved ₹1 Lakh Crore Employment Linked Incentive (ELI) Scheme to generate formal sector jobs, especially in manufacturing, and to improve employability and social security for workers. The ELI scheme aligns with the government’s vision of inclusive economic growth and productive workforce development.
Key Highlights of ELI Scheme
| Feature | Details |
| Approval | Union Cabinet approval in July 2025 |
| Announced in | Union Budget 2024-25 under PM’s Package for Employment and Skilling |
| Total Outlay | ₹99,446 crore |
| Target | Creation of 3.5 crore formal jobs over 2 years. Out of these, 1.92 Cr will be first timers (entering workforce). |
| Scheme Duration | 1 August 2025 – 31 July 2027 |
| Sectors Covered | All sectors with special emphasis on manufacturing |
| Mode of Payments | Through DBT (Direct Benefit Transfer) to employees and PAN-linked accounts for employers |
| Implementing Agency | Ministry of Labour & Employment, in coordination with EPFO |
Scheme Structure: Two-Part Design
Part A – First-Time Employees Incentive
- Target Group: First-time employees registered with EPFO
- Eligibility Salary Cap: Up to ₹1 lakh per month
- Benefit: Wage subsidy equal to one month’s EPF wage, up to ₹15,000
- Disbursement:
- Paid in two instalments:
- 1st instalment: after 6 months of continuous service
- 2nd instalment: after 12 months + completion of financial literacy programme
- Paid in two instalments:
- Savings Component: A portion of the subsidy to be deposited in a savings instrument, locked for a defined period, to inculcate saving habits
Part B – Incentives to Employers for Sustained Employment
- Eligibility: Employers must be EPFO-registered
- Minimum Hiring Requirement:
- Firms with <50 employees: must hire at least 2 new employees
- Firms with ≥50 employees: must hire at least 5 new employees
- Incentive Duration:
- For all sectors: 2 years
- For manufacturing: extended to 4 years
- Incentive Slabs (per employee/month):
- ₹1,000: if EPF wage ≤ ₹10,000
- ₹2,000: if EPF wage between ₹10,001–₹20,000
- ₹3,000: if EPF wage between ₹20,001–₹1,00,000
Expected Impact
- Estimated 1.92 crore new workforce entrants (first-time employees) to benefit under Part A
- Total 3.5 crore formal jobs expected to be created
- Will boost formalisation of the economy and expand EPFO coverage
- Aligns with India’s goal of employment-led growth, skill development, and inclusive economic progress
Significance
- Part of India’s long-term employment strategy post-COVID
- Encourages both employee participation and employer-led job creation
- Incentivizes financial literacy and savings habit among workers
- Supports Make in India and Viksit Bharat 2047 vision through formal job generation in manufacturing
Key Facts
- EPFO (Employees’ Provident Fund Organisation): Under Ministry of Labour and Employment; provides social security for workers.
- Direct Benefit Transfer (DBT): A Government of India initiative to transfer subsidies/welfare payments directly to beneficiaries’ bank accounts.
- PM-DAKSH Scheme: Provides skilling for marginalized sections, including SCs, OBCs, and PwDs.
- National Skill Development Mission (NSDM): Launched in 2015 to align training programs with industry demand.