Employment Linked Incentive scheme.
Broader impact and objectives
The ELI scheme is intended not only to stimulate employment growth across industries but also to accelerate formalization of India’s workforce.
It aims to integrate millions of young people into the formal economy while expanding their access to social security mechanisms.
Expectations are this initiative to particularly strengthen employment in manufacturing while enhancing employability and financial inclusion among first-time workers.
Period of Scheme
Apply to eligible employment generated between August 1, 2025, and July 31, 2027.
The employment scheme is divided into two main components—
· Part A focusing on first-time employees
· Part B Targeting employers.
Part A: Benefits for first-time workers
· This component is designed for individuals entering the workforce for the first time and registered with the Employees’ Provident Fund Organization (EPFO).
· Eligible employees—those earning up to INR 100,000 per month—will receive an EPF-based wage incentive of up to INR 15,000 disbursed in two stages.
· The first half will be paid after six months of continuous service, while the second half will be released upon completing one year of service and a financial literacy program.
· A portion of this incentive will be mandatorily deposited into a savings instrument to foster long-term saving habits, accessible to the employee at a later date.
Part B: Incentives for employers generating jobs
· This segment aims to encourage employers to create sustained new employment, particularly in the manufacturing sector.
· Companies registered with EPFO that hire additional staff earning up to INR 100,000 per month will receive a monthly incentive of up to INR 3,000 per employee for a period of two years. For manufacturing units, this support will continue through the third and fourth years as well.
· Eligibility criteria include the hiring of at least two new employees by establishments with fewer than 50 employees and a minimum of five new hires for those with 50 or more employees.
· All new hires must remain continuously employed for at least six months to qualify.
· The incentive structure will be as under:
| EPF Wage Slabs of Additional Employee (in | Benefit to the Employer (per additional employment per month) |
| Up to Rs 10,000* | Upto Rs 1,000 |
| More than Rs 10,000 and up to Rs 20,000 | Rs 2,000 |
| More than Rs 20,000 (upto salary of Rs 1 Lakh/month) | Rs 3,000 |
Incentive Payment Mechanism:
All payments to the First Time Employees under Part A of the Scheme will be made through DBT (Direct Benefit Transfer) mode using Aadhar Bridge Payment System (ABPS).
Payments to the Employers under Part B will be made directly into their PAN-linked Accounts.
More Clarity is awaited.
