{"id":53031,"date":"2025-07-02T11:36:15","date_gmt":"2025-07-02T06:06:15","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=53031"},"modified":"2025-07-02T11:36:15","modified_gmt":"2025-07-02T06:06:15","slug":"employment-linked-incentive-scheme","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/employment-linked-incentive-scheme\/","title":{"rendered":"Employment Linked Incentive Scheme: India\u2019s Bold Push for Jobs in Manufacturing"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Employment Linked Incentive Latest News<\/span><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Union Cabinet on 1<\/span><span style=\"font-weight: 400;\">st <\/span><span style=\"font-weight: 400;\">July 2025 approved an Employment-Linked Incentive (ELI) scheme with an allocation of Rs. 99,446 crore to support employment generation.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span style=\"font-weight: 400;\">India Launches ELI Scheme to Boost Job Creation and Formal Workforce<\/span><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the landmark Employment Linked Incentive (ELI) Scheme with a financial outlay of Rs. 99,446 crore.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme is part of the government\u2019s larger vision to generate over 3.5 crore jobs over two years, with special emphasis on integrating first-time employees and promoting employment in the manufacturing sector.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This ambitious scheme was announced in the <\/span><b>Union Budget 2024-25<\/b><span style=\"font-weight: 400;\"> as part of a Rs. 2 lakh crore employment and skilling package <\/span><b>aimed at supporting 4.1 crore youth<\/b><span style=\"font-weight: 400;\"> through a combination of direct incentives, skilling initiatives, and social security expansion.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Objectives and Scope of the ELI Scheme<\/span><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Employment Linked Incentive (ELI) Scheme aims to tackle key challenges in India\u2019s labour market, namely low formalisation, slow job growth in manufacturing, and limited incentives for youth entering the workforce.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The dual focus of the scheme, supporting first-time employees and incentivising employers, is structured to make hiring both appealing and sustainable.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme is applicable to jobs created between August 1, 2025, and July 31, 2027. It has two core components:<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Part A: Incentives for First-Time Employees<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Part A of the scheme is designed for first-time employees registering with the <\/span><b>Employees\u2019 Provident Fund Organisation<\/b><span style=\"font-weight: 400;\"> (EPFO). Under this component:<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Employees with monthly salaries up to Rs. 1 lakh will be eligible.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Each eligible employee will receive one month\u2019s EPF wage (up to Rs. 15,000) in two instalments:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">The first instalment will be disbursed after six months of continuous service.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">The second instalment will be released after 12 months and the completion of a mandatory financial literacy programme.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">A portion of the incentive will be held in a savings instrument or deposit account to encourage long-term financial planning.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">This part of the scheme is expected to benefit 1.92 crore first-time workers, helping them integrate into the formal economy while providing a safety net through social security.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Part B: Incentives for Employers to Generate Jobs<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The second component of the scheme targets employers to boost job creation across sectors, with a significant thrust on manufacturing.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Incentives will be disbursed to employers who create additional employment and retain those employees for at least six months.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Key highlights include:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Employers will receive monthly incentives for every new employee hired:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"4\"><span style=\"font-weight: 400;\">Rs. 1,000 for salaries up to Rs. 10,000<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"4\"><span style=\"font-weight: 400;\">Rs. 2,000 for salaries between Rs. 10,001 and Rs. 20,000<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"4\"><span style=\"font-weight: 400;\">Rs. 3,000 for salaries above Rs. 20,000 (up to Rs. 1 lakh)<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">To qualify, employers must add:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"4\"><span style=\"font-weight: 400;\">At least 2 new employees (if total staff &lt;50)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"4\"><span style=\"font-weight: 400;\">At least 5 new employees (if total staff \u226550)<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Incentives will be provided for 2 years across all sectors, and up to 4 years for the manufacturing sector.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">This part is projected to support the creation of around 2.60 crore new jobs.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Implementation and Payment Mechanism<\/span><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">All disbursements under the ELI Scheme will follow a <\/span><b>Direct Benefit Transfer<\/b><span style=\"font-weight: 400;\"> (DBT) model for transparency and efficiency:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Payments to employees (Part A) will be routed through the <\/span><b>Aadhaar Bridge Payment System<\/b><span style=\"font-weight: 400;\"> (ABPS).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Employer incentives (Part B) will be credited directly into PAN-linked accounts.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The incentive-linked model encourages sustained employment and minimises misuse, as both employer and employee benefits are tied to continuity and compliance.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Broader Implications for Labour and Industry<\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme is not just a wage-support mechanism but also a labour formalisation and skill-building initiative.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">By mandating EPFO registration and financial literacy, the ELI scheme aims to bring informal workers into the social security net and empower them for long-term financial inclusion.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Industry bodies have largely welcomed the initiative. Experts from EY India noted that the ELI scheme represents a \u201cmilestone\u201d in fostering an inclusive labour market.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, some trade unions like the <\/span><b>Centre of Indian Trade Unions<\/b><span style=\"font-weight: 400;\"> (CITU) have criticised the scheme, alleging it diverts public funds to the employer class without sufficient accountability mechanisms.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite divergent opinions, the scheme\u2019s design indicates a move toward a more structured, incentive-driven employment landscape, especially in a post-pandemic economy that demands resilience and adaptability in labour markets.<\/span><\/li>\n<\/ul>\n<p><strong>Source: <a href=\"https:\/\/www.thehindu.com\/news\/national\/union-cabinet-approves-various-schemes-on-july-1-2025\/article69759265.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a> | <a href=\"https:\/\/www.pmindia.gov.in\/en\/news_updates\/union-cabinet-approves-employment-linked-incentive-eli-scheme\/?comment=disable#\" target=\"_blank\" rel=\"nofollow noopener\">PMO<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Union Cabinet has approved the Rs. 99,446 crore Employment Linked Incentive Scheme to create over 3.5 crore jobs in India with a focus on first-time employees and the manufacturing sector.<\/p>\n","protected":false},"author":21,"featured_media":53036,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[1253,287,59],"class_list":{"0":"post-53031","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-employment-linked-incentive-scheme","9":"tag-mains-article","10":"tag-upsc-mains-current-affairs","11":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/53031","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=53031"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/53031\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/53036"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=53031"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=53031"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=53031"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}