- ₹99,446 crore outlay targeted at job creation from Aug 2025 to Jul 2027.
- Dual incentive system — employees get direct wage support, employers get per-hire subsidies.
- Special provisions for the manufacturing sector with extended benefits.
- 1.92 crore first-timers and 2.6 crore additional hires expected.
- Payments fully digital, linked to Aadhaar and PAN for transparency.
- Supports formalization of the workforce by bringing more employees under EPFO social security.
Source: EPF Press Release
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Employment-Linked Incentive (ELI) Scheme, aimed at generating over 3.5 crore new jobs between August 1, 2025 and July 31, 2027. With a massive outlay of ₹99,446 crore, the initiative seeks to boost employment, enhance skill development, promote financial literacy, and extend social security coverage, especially in the manufacturing sector.
The ELI Scheme will be implemented through the Employees’ Provident Fund Organisation (EPFO) and will offer direct incentives to both first-time employees and employers hiring additional staff.
Two-Part Structure of the ELI Scheme
Part A – Incentive to First-Time Employees
This part focuses on individuals joining the formal workforce for the first time and registering with the Employees’ Provident Fund Organisation (EPFO).
- Coverage: First-time EPFO registrants with a monthly salary up to ₹1 lakh.
- Incentive Amount: One month’s EPF wage, capped at ₹15,000, paid in two installments.
- First instalment: After completing six months of continuous service.
- Second instalment: After completing twelve months of continuous service and successfully completing a financial literacy programme.
- Savings Component: To encourage saving habits, a portion of the incentive will be kept in a deposit account or savings instrument for a fixed period, withdrawable at a later date.
- Implementation Window: Applies to jobs created between August 1, 2025 and July 31, 2027.
- Expected Reach: Around 1.92 crore first-time employees will benefit under this part of the scheme.
Part B – Support to Employers
This component aims to boost additional employment generation across all sectors, with a special focus on manufacturing.
- Coverage: Employers registered with the Employees’ Provident Fund Organisation (EPFO).
- Eligible Employees: New hires with salaries up to ₹1 lakh per month.
- Incentive Amount: Up to ₹3,000 per month per additional employee for two years, provided the employee remains in sustained employment for at least six months.
- Manufacturing Sector Advantage: In manufacturing, incentives will be extended into the third and fourth years as well.
- Minimum Hiring Threshold:
- Employers with less than 50 employees must hire at least two additional employees.
- Employers with 50 or more employees must hire at least five additional employees.
- These numbers must be maintained for at least six consecutive months.
Incentive Structure Table:
| EPF Wage Slab of Additional Employee | Incentive to Employer (Per Month) |
|---|---|
| Up to ₹10,000 | Up to ₹1,000* |
| More than ₹10,000 and up to ₹20,000 | ₹2,000 |
| More than ₹20,000 (up to ₹1 lakh) | ₹3,000 |
*Employees with EPF wages up to ₹10,000 will get a proportional incentive.
This part of the scheme is expected to result in approximately 2.6 crore additional jobs nationwide.
Payment Process
- Part A (Employees): Paid via Direct Benefit Transfer (DBT) through the Aadhaar Bridge Payment System (ABPS) directly into the employee’s bank account.
- Part B (Employers): Paid directly into PAN-linked bank accounts for transparency and efficiency.
Impact & Goals
- Scale: Over 3.5 crore new jobs across India in two years.
- Youth Focus: 1.92 crore first-time employees supported with wage incentives.
- Manufacturing Boost: Longer incentive period and reduced hiring threshold for manufacturing companies.
- Social Security Expansion: Encourages formal sector employment with EPFO coverage.
- Skill Development: Financial literacy programme tied to employee incentives to promote savings.
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