Union Cabinet okays Rs 1L-crore job-linked incentive scheme
Aims to create over 3.5 crore jobs in 2 years
New Delhi: The Union Cabinet on Tuesday approved an employment-linked incentive (ELI) scheme with an outlay of nearly ₹1 lakh crore to generate over 3.5 crore jobs in the next two years. "You saw in the last Budget that the Finance Minister announced a clear package for an employment-linked scheme. Since then, a lot of good work has been done, and we came up with a comprehensive plan. This is an Employment-Linked Incentive (ELI) scheme, with a focus on the manufacturing sector," Union Minister Ashwini Vaishnaw said at a Cabinet briefing. Under the scheme, first-time employees will get an incentive equivalent to one month’s wage up to ₹15,000 in two instalments. The first instalment will be paid after six months of service, and the second after 12 months, along with completion of a financial literacy programme, the government said in a statement.
“To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date,” the statement said. The ELI scheme, announced in the Union Budget 2024-25 as part of a package for employment and skilling opportunities for 4.1 crore youth, has an outlay of Rs 99,446 crore.
The benefits will apply to jobs created between August 1, 2025 and July 31, 2027.
Two-part scheme
Part A targets first-time employees registered with EPFO and is expected to benefit 1.92 crore workers entering the workforce, while Part B will incentivise employers for creating additional jobs, with benefits of up to Rs 3,000 per employee per month for two years.
For the manufacturing sector, the incentives will be extended for another two years. Employers hiring additional workers with salaries up to Rs 1 lakh per month will be eligible.
Those with less than 50 employees will have to hire at least two more workers, while establishments with 50 or more employees will need to hire at least five more to avail the benefit.
The government said Part B is expected to incentivise the creation of nearly 2.6 crore additional jobs.
Payments to the first-time employees will be made through DBT using Aadhaar-based systems, while employers will receive the incentive in their PAN-linked accounts.
