New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has given the green signal to a scheme giving first-time employees registered with Employees Provident Fund Organisation (EPFO) one month’s wage of up to Rs 15,000 as incentives, Union Information and Broadcasting Minister Ashwini Vaishnaw said Tuesday.
The incentive will be given in two instalments—the first one payable after six months of service and the second after 12 months.
With an outlay of Rs 99,446 crore, the Employment Linked Incentive (ELI) scheme will incentivise the creation of 3.5 crore jobs over two years. Of these, 1.92 crore beneficiaries will be first-timers who have just entered the workforce.
The benefits of the scheme will apply to jobs created from 1 August 2025 to 31 July 2027 and those with salaries of up to Rs 1 lakh will be eligible. .
Earlier, presenting Budget 2024-25, Union Finance Minister Nirmala Sitharaman announced the scheme, a part of the PM’s package of five schemes to facilitate employment and skilling and other opportunities for 4.1 crore youth with a total budget outlay of Rs 2 lakh crore.
The benefits of the scheme, Vaishnaw said, will focus on the manufacturing sector, aligning with the Prime Minister’s Internship Scheme, launched by the government in October 2024.
The Centre envisions providing internship opportunities to one crore youth over the next five years under the PM’s Internship Scheme to ensure they acquire skills for future employment.
Aspirants will train on the job for a year, receiving Rs 5,000 as stipend per month—companies will pay Rs 500 from their CSR funds and the government Rs 4,500. The government will also pay a one-time grant of Rs 6,000 to the youth.
The PM’s Internship Scheme saw high interest during its launch but has, since then, been stuttering.
1st phase for first-timers, 2nd phase for employers
The Employment Linked Incentive (ELI) scheme will be implemented in two parts, A and B.
Part A, which will target first-time employees registered with the EPFO, will offer one-month EPF wage up to Rs 15,000 in two instalments.
“To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument or deposit account for a fixed period and can be withdrawn by the employee at a later date,” according to a statement by the Union Ministry of Labour, which will soon pilot the scheme.
Part B of the scheme will incentivise employers to generate additional employment in all sectors, with a special focus on the manufacturing sector.
The incentives are for employers with employees whose salaries go up to Rs 1 lakh. “The government will incentivise the employers [with amounts] up to Rs 3,000 per month for two years for each additional employee who gets sustained employment for at least six months. For the manufacturing sector, the incentives will extend to the third and fourth years, as well,” Vaishnaw added.
Establishments registered with the EPFO—for at least 6 months—will hire at least two additional employees for employers with fewer than 50 employees, or five additional employees for employers with 50 or more employees.
This part will also likely incentivise employers to create additional employment for nearly 2.6 crore persons.
All payments to first-time employees under Part A will be in Direct Benefit Transfers via the Aadhaar Bridge Payment System. All payments to employers under Part B will directly go into their PAN-linked accounts.
“With the ELI scheme, the government intends to catalyse job creation in all sectors, particularly in the manufacturing sector, besides incentivising youth into joining the workforce for the first time. An important outcome of the scheme will also be formalisation of the country’s workforce by extending social security coverage for crores of young men and women,” the labour ministry statement said.
(Edited by Madhurita Goswami)
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