Modi Cabinet approves ₹99,446 crore ELI scheme to create 3.5 crore jobs

The Prime Minister Narendra Modi-led Cabinet on Tuesday approved the ambitious Employment Linked Incentive (ELI) scheme, allocating an outlay of ₹99,446 crore to significantly promote job creation and enhance social security across all sectors, with a particular emphasis on the manufacturing industry. Union Minister Ashwini Vaishnaw announced that this scheme aims to facilitate the creation of over 3.5 crore jobs in the country.

The ELI scheme is structured into two main components: one designed for first-time employees and the other for employers. Under the first part, eligible first-time employees registered with the EPFO, earning up to ₹1 lakh per month, will receive one month's EPF wage (up to ₹15,000) in two installments. The first installment will be disbursed after six months of employment, with the second following after twelve months, conditional on the completion of a basic financial literacy program. A portion of this incentive is also intended to be deposited into a savings account to encourage saving habits.

For employers, the scheme offers incentives for hiring new workers and sustaining their employment. The government will incentivize employers up to ₹3,000 per month for two years for each additional employee whose employment is sustained for at least six months. This benefit can be extended up to four years for manufacturing companies. To qualify, employers with fewer than 50 employees must hire at least two additional workers, while those with 50 or more must hire at least five. The new employees must earn up to ₹1 lakh per month to be eligible. The incentive amount for employers varies based on the employee's monthly EPF wage, ranging from up to ₹1,000 for wages up to ₹10,000, a fixed ₹2,000 for wages between ₹10,000 and ₹20,000, and a fixed ₹3,000 for wages exceeding ₹20,000 up to ₹1 lakh. Payments to employees will be made via Direct Benefit Transfer (DBT) through the Aadhaar-based payment system, while employers will receive payments in their PAN-linked business accounts.