The Union Cabinet has given the green light to the Employment-Linked Incentive (ELI) scheme with a budget of Rs 1 lakh crore, announced on 1st July by Information and Broadcasting Minister Ashwini Vaishnaw. This significant initiative is designed to stimulate employment across all sectors, with a special emphasis on boosting the manufacturing industry. The ELI scheme is set to span two years, aiming to generate over 3.5 crore jobs, nearly half of which will benefit first-time employees entering the workforce.
The scheme is structured into two parts: Part A, which focuses on first-time employees, and Part B, which supports employers. Part A targets individuals newly registered with the Employees Provident Fund Organisation (EPFO), offering them a one-month EPF wage of up to Rs 15,000, disbursed in two installments. The first installment will be paid after six months of employment, with the second following after a year, contingent upon the completion of a financial literacy programme. This initiative is expected to benefit approximately 1.92 crore new employees.
For employers, Part B of the scheme provides incentives for generating additional employment. Employers will receive up to Rs 3,000 per month for each additional employee with a salary up to Rs 1 lakh, sustained over at least six months. This incentive will last for two years and will be extended for up to four years specifically for the manufacturing sector. This extension is aimed at encouraging long-term growth and stability within the industry.
Establishments registered with the EPFO are required to hire a minimum of two additional employees if they have less than 50 staff, or five additional employees if they have 50 or more. This measure is aimed at ensuring sustained employment growth and is pivotal to the scheme’s overarching goal of revitalising India’s employment landscape.
The ELI scheme aligns with initiatives announced in the Union Budget 2024-25, part of a broader package aimed at enhancing employment, skilling, and other opportunities for India’s youth. The comprehensive budgetary allocation of Rs 2 lakh crore underscores the government’s commitment to fostering economic growth through robust job creation strategies.
By targeting both the supply and demand sides of employment, the scheme is expected to enhance employability and provide social security benefits, thereby addressing critical employment challenges. This dual approach aims not only to provide immediate job opportunities but also to build a sustainable employment framework for the future.
Overall, this ambitious scheme is set to play a crucial role in shaping India’s economic recovery and growth, particularly by empowering the manufacturing sector, which is pivotal to the country’s industrial strategy. The ELI scheme’s successful implementation could serve as a template for future policies targeting employment generation and economic revitalisation. By fostering a robust job market, the scheme also aims to uplift the socio-economic status of millions, contributing to a more equitable society.
The government has also given its approval for a Research, Development, and Innovation (RDI) scheme worth Rs 1 lakh crore with the goal of enhancing India’s proficiency in vital and upcoming technologies. The initiative will prioritize promoting indigenous innovation, specifically in fields like clean energy, climate action, AI applications in agriculture and healthcare, digital economy, advanced technology, space research, and biotechnology.
