**Policy Summary: Employment Linked Incentive (ELI) Scheme**
On July 1, 2025, the Government of India approved the Employment Linked Incentive (ELI) Scheme to incentivize employment generation, enhance employability, and improve social security compliance. The scheme, with a budgetary outlay of ₹99,446 crore for fiscal years 2025-26 to 2031-32, will run with a registration period of two years, from August 1, 2025, to July 31, 2027. The scheme comprises two parts, A and B, and provides support to both employees and employers. Part A incentivizes 1.92 crore new eligible employees, while Part B incentivizes employers for the creation of approximately 2.59 crore additional jobs. All establishments covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 are eligible for incentives, with a special focus on the manufacturing sector. The scheme aims to improve wage levels and social security compliance, including contributions to the Employees' Provident Fund Organisation (EPFO).
Key Entities Referenced
Employment Linked Incentive ELI scheme: A government scheme designed to improve wages levels and social security compliance by offering fiscal incentives or tax rebates to employers.
Employees' Provident Fund Organisation EPFO: An organization related to social security compliance, specifically mentioned in the context of employer contributions.
SHRI BHARTRUHARI MAHTAB: The member of parliament who raised the starred question about tax rebates under the ELI Scheme.
DR. MANSUKH MANDAVIYA: The Minister of Labour and Employment who provided the response to the Lok Sabha question.
Prime Ministers Incentive Scheme PMIS: A government incentive scheme, possibly related to MSMEs and large corporates, mentioned in comparison to the ELI scheme.
MSMEs: Micro, Small and Medium Enterprises, which are being considered for incentives under the ELI scheme.
EPFMP Act 1952: The Employees' Provident Funds and Miscellaneous Provisions Act 1952, under which establishments must be covered to be eligible for incentives.
Lok Sabha: The lower house of the Parliament of India, where the starred question was raised and answered.
GOVERNMENT OF INDIA
MINISTRY OF LABOUR AND EMPLOYMENT
LOK SABHA
STARRED QUESTION NO. 214
TO BE ANSWERED ON 04.08.2025
TAX REBATES UNDER THE ELI SCHEME
*214. SHRI BHARTRUHARI MAHTAB:
Will the Minister of LABOUR AND EMPLOYMENT be pleased to
state:
(a)whether the Government proposes to offer fiscal incentives or tax
rebates to employers under the Employment Linked Incentive (ELI)
scheme to improve wages levels and social security compliance
e.g., Employees' Provident Fund Organisation (EPFO) contributions;
(b)if so, the details thereof; and
(c)whether these incentives are available to MSMEs and not just to
large corporates under the Prime Minister’s Incentive Scheme
(PMIS) or ELI framework?
MINISTER OF LABOUR AND EMPLOYMENT
(DR. MANSUKH MANDAVIYA)
(a) to (c): A statement is laid on the Table of the House.
* *****STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED
QUESTION NO. *214 DUE FOR REPLY ON 04.08.2025 BY SHRI
BHARTRUHARI MAHTAB, “TAX REBATES UNDER THE ELI SCHEME”.
(a) to (c): The Government on 01.07.2025 approved the Employment
Linked Incentive (ELI) Scheme. The scheme has a registration period of two
years from 01.08.2025 to 31.07.2027 and a budgetary outlay of ₹ 99,446
Crore for the period FY 2025-26 to FY 2031-32. The scheme comprises of
two parts i.e. Part A and Part B and focuses on providing support to both
employees and employers by way of incentives. The scheme provides for
incentives for 1.92 crore new eligible employees under Part A. Incentive
for creation of approx. 2.59 crore additional jobs to employers is
provided for under Part B of the scheme.
The scheme will support employment generation, enhance
employability and social security, across all sectors with special focus on
the manufacturing sector. All Establishments covered under EPF&MP Act
1952 are eligible for incentives as per the scheme guidelines.
*****