**Employment Linked Incentive (ELI) Scheme: Policy Summary**
On July 1, 2025, the Union Cabinet, chaired by the Prime Minister, approved the Employment Linked Incentive (ELI) Scheme, a comprehensive initiative designed to boost employment generation, enhance employability, and expand social security coverage across all sectors, with a specific emphasis on the manufacturing sector. This scheme, announced as part of the Union Budget 2024-25 within a larger package of five schemes aimed at benefiting 4.1 Crore youth with a total budget of Rs 2 Lakh Crore, carries an individual outlay of Rs 99,446 Crore and aims to incentivize the creation of over 3.5 Crore jobs within two years. The scheme will be applicable for jobs created between August 1, 2025, and July 31, 2027.
The ELI Scheme comprises two distinct parts:
**Part A: Incentive to First-Time Employees:** This component targets first-time employees registered with the Employees' Provident Fund Organisation (EPFO) and offers a one-month EPF wage, up to Rs 15,000, disbursed in two installments. Eligibility extends to employees with salaries up to Rs 1 lakh. The first installment is payable after six months of service, and the second after twelve months, contingent upon the employee's completion of a financial literacy program. A portion of the incentive will be allocated to a savings instrument of deposit account for a fixed period. This part of the scheme is projected to benefit approximately 1.92 crore first-time employees. Payments will be made through Direct Benefit Transfer (DBT) using the Aadhar Bridge Payment System (ABPS).
**Part B: Support to Employers:** This element focuses on incentivizing the generation of additional employment across all sectors, with a heightened focus on manufacturing. Employers will receive incentives for a period of two years, with extended benefits for the 3rd and 4th years within the manufacturing sector, in respect of employees earning salaries up to Rs 1 lakh. The government will provide incentives up to Rs 3,000 per month for each additional employee with sustained employment of at least six months. Establishments registered with EPFO are required to hire at least two additional employees (for employers with less than 50 employees) or five additional employees (for employers with 50 or more employees) on a sustained basis of six months. The incentive structure is differentiated by EPF wage slabs:
* Up to Rs 10,000: Up to Rs 1,000 incentive per additional employee per month
* More than Rs 10,000 and up to Rs 20,000: Rs 2,000 incentive per additional employee per month
* More than Rs 20,000 and up to Rs 1 Lakh: Rs 3,000 incentive per additional employee per month
Employees with EPF wages up to Rs. 10,000 will get a proportional incentive.
Part B anticipates incentivizing employers for the creation of approximately 2.60 crore additional jobs. Payments to employers under Part B will be directly credited to their PAN-linked accounts.
The ELI Scheme is intended to catalyze job creation, formalize the workforce by extending social security coverage, and incentivize youth employment, particularly within the manufacturing sector.
Key Entities Referenced
Employment Linked Incentive ELI Scheme: A scheme approved by the Union Cabinet to support employment generation, enhance employability and social security across all sectors, with a special focus on the manufacturing sector.
Union Cabinet: The decision-making body of the Government of India, chaired by the Prime Minister.
Shri Narendra Modi: The Prime Minister of India.
Union Budget 2024-25: The annual financial statement of the Government of India for the fiscal year 2024-2025.
EPFO: Employees' Provident Fund Organisation, a statutory body overseeing a compulsory contributory Provident Fund Scheme.
DBT Direct Benefit Transfer: A mechanism to transfer subsidies and benefits directly to beneficiaries through their bank accounts.
Aadhar Bridge Payment System ABPS: A payment system that uses the Aadhar identification system to facilitate direct benefit transfers.
Ministry of Labour Employment: A ministry of the Government of India responsible for labour and employment related policies and regulations.
Ministry of Labour & Employment
Cabinet Approves Employment Linked Incentive
(ELI) Scheme
Scheme to Enhance Job Creation, Employability and
Social Security in all Sectors
Focus on Manufacturing Sector and Incentives for
First Timers
First Timers to get one month’s wage up to Rs
15,000/- in two installments
Scheme to Support Employment Generation of more
than 3.5 Crore Jobs in two Years with an Outlay of
Rs one lakh Crore
Posted On: 01 JUL 2025 3:06PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has approved the Employment Linked
Incentive (ELI) Scheme to 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 month’s wage (up to Rs 15,000/-), the employers will be given incentives for a period to two
years for generating additional employment, with extended benefits for another two years for the
manufacturing sector. The ELI Scheme was announced in the Union Budget 2024-25 as part of PM’s
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 incentivize 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,
st
entering the workforce. The benefits of the Scheme would be applicable to jobs created between 01 August
st
2025 and 31 July, 2027.
The Scheme consists of two parts with Par A focused on first timers and Part B focused on employers:
Part A: Incentive to First Time Employees:
Targeting first-time employees registered with EPFO, this Part will offer one-month EPF wage up to Rsst
15,000 in two installments. Employees with salaries up to Rs 1 lakh will be eligible. The 1 installment will
nd
be payable after 6 months of service and the 2 installment 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.
The Part A will benefit around 1.92 crore first time employees.
Part B: Support to Employers:
This part will cover generation of additional employment in all sectors, with a special focus on the
manufacturing sector. The employers will get incentives in respect of employees with salaries up to Rs 1
lakh. The Government will incentivize employers, up to Rs 3000 per month, for two years, for each
additional employee with sustained employment for at least six months. For the manufacturing sector,
rd th
incentives will be extended to the 3 and 4 years as well.
Establishments, which are registered with EPFO, will be required to hire at least two additional employees
(for employers with less than 50 employees) or 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 Slabs of Additional Employee Benefit to the Employer (per additional
(in 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
Rs 3,000
Lakh/month)
*Employees with EPF wages up to Rs. 10,000 will get a proportional incentive.
This part is expected to incentivize employers for the creation of additional employment of nearly 2.60 crore
persons.
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.
With ELI Scheme, the government intends to catalyse job creation in all sectors, particularly in manufacturing
sector, besides incentivizing youth joining the workforce for the first time. An important outcome of the
Scheme will also be formalization of the country’s workforce by extending social security coverage for crores
of young men and women.
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MJPS/BM
(Release ID: 2141129)