New Delhi: The Union Government has rolled out the Employment Linked Incentive (ELI) Scheme with an initial funding of Rs 1.07 lakh crore. The scheme was announced in this year’s Union Budget. The scheme is expected to create 3.5 crore jobs in the next two years through the help of the government body EPFO (Employees’ Provident Fund Organisation). The jobs to be created with the help of the social security scheme run by EPFO.
The scheme was approved in a cabinet meeting chaired by Prime Minister Narendra Modi. The ELI Scheme aims to support job creation and enhance employability and social security in all sectors but with a special emphasis on the manufacturing sector, said Ashwini Vaishnav, Union Information and Broadcasting Minister.
The scheme is set to provide incentives to the employees as well as the employer to promote job creation. For the first-time employee, he/she will be receiving one month’s wage (up to Rs 15000) under the scheme. For the employers, they will be given additional incentives for the period of two years so as to nudge them to generate additional employment. The special emphasis is placed on the manufacturing sector with extended additional benefits for two years. The benefits of the scheme are applicable to the jobs created between 1st August 2025 and 31st July 2027.
ELI Scheme
Part 1 includes the benefits that are to be credited into the EPF account of employees that are having salaries up to Rs 1 lakh per annum. The first installment is to be paid after six months of service, and the second installment after 12 months of service, provided the completion of the financial literacy program on the employee’s part.
“To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument or deposit account for a fixed period and can be withdrawn by the employee at a later date. Part A will benefit around 1.92 crore first-time employees,” said the PIB statement.
Part 2 contains the benefits for employers to push them to create additional employment in all sectors, with an enhanced emphasis on the manufacturing sector. The employers are set to receive incentives with respect to employees with salaries up to Rs 1 lakh.
Through EPFO, the government will incentivize employers up to Rs 3000 per month for two years. For the manufacturing sector, incentives are set to be extended to the third and fourth years as well.
All payments are to be made by DBT to the first-time employees with the help of the Aadhar Bridge Payment System (ABPS), while for the payments made to the employers, PAN-linked accounts will be required.