New scheme to boost job creation
Cabinet Approves Employment Linked Incentive Scheme: The Cabinet has approved the Employment Linked Incentive (ELI) Scheme to address job generation and workforce participation. Announced in the Union Budget 2024–25, this scheme is part of the PM’s package of five major employment-focused schemes.
The total outlay for the scheme is ₹99,446 crore for two years from 2025 to 2027. It aims to generate 3.5 crore jobs, including 1.92 crore first-time employees.
Key goals and coverage
The objective of the scheme is to promote large-scale job creation, especially in the manufacturing sector, while also enhancing employability and expanding social security.
The scheme will offer direct benefit transfers (DBT) to both first-time employees and employers. The Aadhar Bridge Payment System (ABPS) will be used to ensure transparency and timely payments.
Static GK fact: The Ministry of Labour & Employment is responsible for employment generation, labour welfare, and social security measures in India.
Incentives for first-time employees
Under Part A, first-time employees registered with EPFO and earning up to ₹1 lakh per month are eligible. These employees will receive an incentive equal to one month’s EPF wage (up to ₹15,000).
The incentive will be disbursed in two instalments:
- First instalment: After 6 months of continuous employment.
- Second instalment: After 12 months and completion of a financial literacy programme.
To encourage savings, a portion of the amount will be deposited into a lock-in savings instrument.
Employer-linked incentives
Under Part B, incentives will be given to EPFO-registered establishments that hire:
- At least 2 additional employees if the workforce is below 50.
- At least 5 additional employees if the workforce is 50 or more.
Eligible employers will receive up to ₹3,000 per new hire per month for a period of 2 years. In the manufacturing sector, the incentive period will be extended to 4 years.
Static GK Tip: The Employees’ Provident Fund Organisation (EPFO) is one of the world’s largest social security organizations, established in 1952.
Employment and social impact
The scheme is projected to create an additional 2.6 crore jobs across all sectors. The payment to employees will be made directly into PAN-linked bank accounts. The minimum employment period for eligibility is six months.
This initiative supports inclusive growth, financial literacy, and the formalization of the workforce, especially in labour-intensive sectors.
Static Usthadian Current Affairs Table
Cabinet Approves Employment Linked Incentive Scheme:
| Topic | Detail |
| Scheme Name | Employment Linked Incentive (ELI) Scheme |
| Ministry | Ministry of Labour & Employment |
| Launch Year | Announced in Union Budget 2024–25 |
| Total Outlay | ₹99,446 crore |
| Duration | 2025 to 2027 |
| Target Job Creation | 3.5 crore (1.92 crore first-time) |
| Eligibility | EPFO-registered employees and employers |
| Employee Incentive | 1 month EPF wage (up to ₹15,000) in 2 instalments |
| Employer Incentive | Up to ₹3,000/month per hire |
| Payment Mechanism | Direct Benefit Transfer via ABPS |
