Big step toward mass employment
Cabinet clears ELI Scheme to create 3.5 crore jobs: The Union Cabinet has approved the Employment Linked Incentive (ELI) Scheme with a total outlay of nearly ₹1 lakh crore. This flagship program is targeted to create over 3.5 crore jobs between August 1, 2025, and July 31, 2027, particularly for youth and first-time job seekers.
Announced in the Union Budget 2024–25, the scheme is a key part of the government’s ₹2 lakh crore employment and skilling package. It supports both jobseekers and employers, encouraging formal employment, EPFO registration, and financial inclusion.
Objectives of the scheme
The ELI scheme is designed to:
- Generate 3.5 crore formal jobs in two years
- Promote employment in manufacturing and service sectors
- Encourage hiring of first-time employees
- Boost EPFO-linked social security coverage
- Develop financial literacy and savings habit among youth
Benefits for first-time employees
Under Part A, the scheme provides incentives directly to 1.92 crore new EPFO-registered employees. Eligible workers earning up to ₹1 lakh/month will receive a one-month wage up to ₹15,000, disbursed in two parts:
- First installment: After 6 months of continuous service
- Second installment: After 12 months and completion of financial literacy training
Static GK fact: The Employees’ Provident Fund Organisation (EPFO) was established in 1952 and covers over 27 crore workers in India.
A part of the incentive will be locked in savings instruments, such as provident funds or small savings schemes, to promote long-term financial discipline.
Support for employers
Part B of the ELI Scheme focuses on helping employers expand their workforce. All sectors are covered, with special incentives for manufacturing.
Eligibility is based on firm size:
- Minimum of 2 new hires (for firms with fewer than 50 employees)
- Minimum of 5 new hires (for firms with 50 or more employees)
Incentives are given for retaining employees for at least six months. Employers registered with EPFO are eligible.
Incentive slab for employers:
| Employee EPF Wage | Employer Incentive per Month |
| Up to ₹10,000 | ₹1,000 |
| ₹10,001 – ₹20,000 | ₹2,000 |
| ₹20,001 – ₹1,00,000 | ₹3,000 |
For the manufacturing sector, incentives will also be available during the 3rd and 4th years, giving a longer-term boost to ‘Make in India’.
Direct and transparent payments
- Part A payments will be made via DBT using the Aadhaar Bridge Payment System.
- Part B incentives for employers will be credited to their PAN-linked bank accounts.
Static GK Tip: DBT (Direct Benefit Transfer) was launched in India in 2013 to reduce leakage and ensure subsidies reach the intended beneficiaries.
National impact
The ELI Scheme is a major push toward:
- Reducing post-COVID unemployment
- Promoting financial inclusion
- Enhancing employer accountability
- Supporting social and economic mobility
It aims to bring millions of Indians into the formal job sector while aligning with the government’s broader vision of self-reliant India.
Static Usthadian Current Affairs Table
Cabinet clears ELI Scheme to create 3.5 crore jobs:
| Topic | Detail |
| Scheme Name | Employment Linked Incentive (ELI) Scheme |
| Approval Date | July 1, 2025 |
| Job Creation Target | 3.5 crore jobs in 2 years |
| Total Scheme Outlay | ₹1 lakh crore |
| Part A Benefit | ₹15,000 per employee (in 2 installments) |
| Part B Incentive | ₹1,000–₹3,000/month to employers |
| Special Focus Sector | Manufacturing |
| Payment Mechanism | DBT via Aadhaar & PAN-linked accounts |
| EPFO Coverage | Mandatory for both employer and employee |
| Implementation Window | August 2025 – July 2027 |
