06/07/2025
As India tackles high levels of youth unemployment/underemployment. Central government has taken a bold step of incentivizing employers and employees both by launching the Employment Linked Incentive (ELI) Scheme on July 01, 2025, aiming to generate employment opportunities, expanding social security coverage and particularly benefiting the youth. The ELI scheme is part of a broader employment and skilling initiative with a total budget outlay of ₹2 lakh crore. The scheme targets the creation of over 3.5 crore jobs in two years, with 1.92 crore beneficiaries being first-time job seekers. This scheme is effective from August 01, 2025.
Government expectation from Industries:
The ELI scheme emphasises on stimulating the private sector participation in job creation, workforce development and to motivate employers to hire more workforce, while also encouraging skill development and job retention.
Salient features of the scheme :
Under these schemes, incentive is available for employers hiring additional employees and for employees taking up first time employment. The benefits of the Scheme would be applicable to jobs created between 01st August 2025 and 31st July, 2027.
Scheme A - Incentive to First Time Employees:
It will provide first-time employees earning up to INR 1 lakh per month with an incentive of INR 15,000, distributed in two installments.
Scheme B - Support to Employers:
It is particularly beneficial for employers looking to expand their workforce. It offers an incentive of up to INR 3,000 per additional employee per month. Employers in the non-manufacturing sector can access this support for 2 years, while those in the manufacturing sector can enjoy it for 4 years. Establishments, which are registered with EPFO, will be required to hire at least two additional employees (for employers having less than 50 employees) or at least five additional employees (for employers with 50 or more employees), on a sustained basis for at least six months.
The incentive structure will be as under:
EPF wage Up to Rs 10,000* - upto 1000
More than Rs 10,000 and up to Rs 20,000 - upto 2000
More than Rs 20,000 (upto salary of Rs 1 Lakh/month)- Rs 3,000
Impact on company:
As our company is having a number of employees more than 50, government will incentivize upto Rs. 3,000/- per month for each additional employee onboarded subject to continuity of service for atleast 6 months. For instance, in case company will hire 100 additional employees, could receive up to INR 72 lakh over 2 years.
