Cabinet Approves ₹1 Lakh Crore Employment-Linked Incentive Scheme to Boost Job Creation

The Union Cabinet, chaired by Prime Minister Narendra Mod,i on Tuesday approved the Employment Linked Incentive (ELI) Scheme, with an outlay of Rs 1 lakh crore aimed at creating 3.5 crore additional jobs in the next two years.

The scheme will support employment generation, enhance employability and social security across all sectors, with special focus on the manufacturing sector. Under the scheme, while the first-time employees will get one months wage up to Rs 15,000, the employers will be given incentives for a period of two years for generating additional employment, with extended benefits for another two years in the manufacturing sector.

The ELI Scheme was announced in the Union Budget 2024-25 as part of the Prime Ministers package of five schemes to facilitate employment, skilling and other opportunities for 4.1 crore youth with a total budget outlay of Rs 2 lakh crore.

With an outlay of Rs 99,446 crore, the ELI Scheme aims to incentivise the creation of more than 3.5 crore jobs in the country over a period of 2 years. Out of these, 1.92 crore beneficiaries will be first timers, entering the workforce. The benefits of the scheme would be applicable to jobs created between August 1, 2025 and July 31, 2027, according to an official statement. The Scheme consists of two parts, with Part A focused on first timers and Part B focused on employers:

Targeting first-time employees registered with EPFO, this part will offer a one-month EPF wage up to Rs 15,000 in two instalments. Employees with salaries up to Rs 1 lakh will be eligible. The first instalment will be payable after 6 months of service, and the second instalment will be payable after 12 months of service and completion of a financial literacy programme by the employee. 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a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.