The Union Cabinet, led by Prime Minister Narendra Modi, on Tuesday approved the Employment Linked Incentive (ELI) Scheme, aimed at boosting job creation and enhancing social security, especially in the manufacturing sector.
Announcing the scheme, Union Minister Ashwini Vaishnaw said the ELI scheme, with a massive outlay of ₹99,446 crore, is expected to create over 3.5 crore jobs across various sectors in the country.
Key Features of the ELI Scheme
#Cabinet approves Employment Linked Incentive scheme to support employment generation, enhance employability and social security across all sectors, with special focus on the manufacturing sector#CabinetDecisions pic.twitter.com/JYYz5dbc36
— Dhirendra Ojha (@DG_PIB) July 1, 2025
The scheme has two components—one for first-time employees and another for employers:
🧑💼 For First-Time Employees
- Eligibility: Must be newly registered under EPFO, with monthly salary up to ₹1 lakh.
- Incentive: One month’s EPF wage support (up to ₹15,000), in two instalments:
- First instalment: After 6 months of continuous employment.
- Second instalment: After 12 months, and completion of a basic financial literacy course.
- A portion of the incentive will be deposited in a savings account, encouraging long-term savings.
🏢 For Employers
- Incentive Duration:
- Standard industries: Up to 2 years.
- Manufacturing sector: Extended up to 4 years.
- Payment method: Direct Benefit Transfer (DBT) to PAN-linked business accounts.
- Hiring Criteria:
- Employers with <50 employees: Must hire at least 2 new workers.
- Employers with 50+ employees: Must hire at least 5 new workers.
- New employees must have monthly salaries up to ₹1 lakh.
Employer Incentives Based on Employee Salary:
| Employee Monthly Salary Range | Employer Incentive (Per Month) |
|---|---|
| Up to ₹10,000 | Up to ₹1,000 (proportional) |
| ₹10,001 – ₹20,000 | ₹2,000 (fixed) |
| ₹20,001 – ₹1,00,000 | ₹3,000 (fixed) |
🎯 Scheme Objectives
- Encourage hiring of first-time workers.
- Support sustained employment across sectors.
- Promote financial literacy, social security, and long-term saving habits.
- Empower manufacturing sector expansion and job absorption.
💬 Related Remarks
Finance Minister Nirmala Sitharaman recently addressed concerns around government-led employment schemes, stating,
“Job schemes are not a mandate but a nudge to companies. Who is intruding?”
The ELI scheme reflects the Centre’s continued effort to link economic growth with tangible employment benefits, while also strengthening the EPFO ecosystem and formal workforce participation.
This initiative comes at a time when the government is aiming to boost domestic manufacturing under the Make in India umbrella, while also easing employer burdens and incentivising skill-based hiring.