Massive Employment Push Backed by Budget
With a total outlay of ₹99,446 crore, the ELI scheme forms part of the ₹2 lakh crore youth-centric package announced in the Union Budget 2024-25. It aims to generate over 3.5 crore new jobs between August 1, 2025 and July 31, 2027.
The scheme primarily targets first-time workers and employers in the manufacturing sector. Of the total, approximately 1.92 crore new employees will benefit as first-time entrants into the formal workforce.
Part A: Direct Incentives for First-Time Employees
This part offers a one-time wage incentive of up to ₹15,000 (in two installments) to new employees registered under the EPFO. To be eligible:
- Monthly salary must not exceed ₹1 lakh
- First installment is paid after 6 months of continuous service
- Second installment is given after 12 months and completion of a financial literacy program
Part of the amount will be parked in a fixed deposit or savings instrument to encourage long-term saving habits.
Part B: Incentives for Employers
Under this section, employers will receive monthly financial support for each additional employee hired, based on wage brackets:
| EPF Wage Range | Incentive/Employee/Month |
|---|---|
| Up to ₹10,000 | Up to ₹1,000 |
| ₹10,001 – ₹20,000 | ₹2,000 |
| ₹20,001 – ₹1,00,000 | ₹3,000 |
To qualify, employers must hire:
- At least 2 additional employees (for firms with <50 workers)
- At least 5 additional employees (for firms with ≥50 workers)
These hires must be retained for at least 6 months. For manufacturing firms, benefits are extended to the 3rd and 4th years as well.
Payments via DBT and PAN Linked Accounts
All payments to workers under Part A will be made via Direct Benefit Transfer (DBT) using Aadhaar-based ABPS. Employers will receive funds in their PAN-linked accounts.
This seamless transfer mechanism ensures speed, transparency, and accountability in disbursal of incentives.
Wider Impact and Vision
The ELI scheme is designed to formalize India’s workforce, bringing more youth under the umbrella of social security schemes such as EPFO and ESIC. The focus on the manufacturing sector aligns with India’s Make in India initiative, encouraging job-rich industrial growth.
By offering direct incentives, the scheme reduces onboarding cost for both workers and employers. It addresses two critical challenges—youth unemployment and job informality—simultaneously.
Ultimately, the ELI scheme stands as a bold policy step to ensure that India’s demographic dividend is effectively harnessed and its economic engine continues to gain momentum.
