Employment Linked Incentive Scheme for Job Creation
The Employment Linked Incentive (ELI) Scheme was approved by the Union Cabinet in 2025. It aims to boost job creation and enhance employability across various sectors. The scheme focuses particularly on the manufacturing sector. It was introduced as part of a broader initiative to support 4.1 crore youth with a budget of ₹2 lakh crore. The ELI Scheme is expected to create over 3.5 crore jobs in two years, with number of first-time employees benefiting.
ELI Scheme
The ELI Scheme consists of two main parts. Part A targets first-time employees, while Part B offers support to employers. The scheme is designed to provide financial incentives to both employees and employers to stimulate job creation.
Part A – Incentives for First-Time Employees
First-time employees registered with the Employees’ Provident Fund Organisation (EPFO) can receive one month’s wage, capped at ₹15,000. The payment is divided into two instalments. The first instalment is paid after six months of service, while the second is paid after twelve months, contingent on completing a financial literacy programme. This part aims to encourage savings by holding a portion of the incentive in a fixed deposit account.
Part B – Support for Employers
Employers are incentivised to create additional jobs. They can receive up to ₹3,000 per month for each new employee hired, provided the employee’s salary does not exceed ₹1 lakh. The incentives apply for two years, with extended benefits for manufacturing sector employers. To qualify, employers must hire a minimum number of additional employees based on their workforce size.
Eligibility Criteria
To qualify for the scheme, employees must have salaries up to ₹1 lakh. Employers must register with EPFO and maintain the employment of new hires for at least six months. The incentive structure varies according to the employee’s wage slab.
Incentive Payment Mechanism
Payments to first-time employees will be made via Direct Benefit Transfer (DBT) using the Aadhar Bridge Payment System (ABPS). Employers will receive payments directly into their PAN-linked accounts. This mechanism ensures transparency and efficiency in disbursing benefits.
Expected Outcomes
The ELI Scheme aims to formalise the workforce and extend social security coverage to millions of young workers. It also seeks to stimulate job creation across all sectors, particularly in manufacturing. The initiative is expected to contribute to the economic landscape by integrating more youth into the workforce.
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