New Delhi: The Union Cabinet has given its crucial approval to the Employment-Linked Incentive (ELI) Scheme, marking a substantial policy step towards comprehensive employment generation and social security in India. Envisioned as a vital component of the Union Budget 2024-25, this scheme forms part of a larger, ambitious package designed to create diverse opportunities for approximately 4.1 crore youth across the country. With an allocated outlay of Rs 99,446 Crore, the ELI Scheme sets an ambitious target of incentivising the creation of over 3.5 crore jobs within a two-year timeframe, with a distinct emphasis on bolstering the manufacturing sector.

Understanding the ELI Scheme: Key Components

The ELI Scheme is strategically structured into two interconnected parts, designed to benefit both employees and employers, thereby creating a robust ecosystem for job growth and formalisation:

Part A: Incentives for First-Time Employees: This segment of the scheme targets first-time employees, providing a financial incentive equivalent to one month's wage, up to a maximum of Rs 15,000. This amount will be disbursed in two instalments to individuals who are registered with the Employees' Provident Fund Organisation (EPFO) and have earnings up to Rs 1 lakh. The objective here is to encourage formal employment and provide direct support to new entrants in the workforce.

Part B: Incentives for Employers: This part focuses on supporting employers who actively contribute to job creation. It offers incentives for generating additional employment, with a notable emphasis on the manufacturing sector. Employers can receive up to Rs 3000 per month for a period of two years for each additional employee, provided that the employment is sustained for at least six months. The manufacturing sector will receive extended benefits for an additional two years, highlighting the government's push to boost industrial employment.

Beyond direct job creation, a key expected outcome of the ELI Scheme is the formalisation of the workforce. By linking incentives to EPFO registration and sustained employment, the scheme aims to extend crucial social security coverage to a large number of young individuals, integrating them into the formal economy. The approval of the ELI Scheme marks a strategic step in the government's agenda to drive economic growth through robust employment opportunities and comprehensive social welfare.