The Union Cabinet has cleared a Rs 1trillion Employment-Linked Incentive (ELI) scheme with the goal of generating 35 million new jobs over the next two years. The move is part of an effort to stimulate formal employment and support first-time job seekers across the country, especially in the manufacturing sector.
Under the scheme, first-time employees—those registering with the Employees’ Provident Fund Organisation (EPFO) for the first time—will be eligible for financial support. The government will provide direct incentives of up to Rs 15,000 per employee, depending on salary slabs. Employees earning up to Rs 1 lakh per month qualify for the benefit.
The scheme sets minimum hiring targets for employers. Companies with up to 50 workers will need to hire at least two additional employees, while larger firms with more employees will be expected to bring in five or more. To encourage employers, the government will offer incentives of Rs 1,000 to Rs 3,000 per new hire, with the scale differing from employee to employee based on wage.
This initiative comes at a time when the country is focused on tackling youth unemployment and boosting job creation in sectors such as manufacturing. The incentives will apply to new positions created between August 1, 2025, and July 31, 2027.
Workplaces across urban and rural regions are expected to benefit, with formalisation of the workforce being a key objective. The scheme also aligns with the broader employment and skilling agenda outlined in the Union Budget 2024–25, which earmarked Rs 2 trillion for youth-centric schemes.
The government hopes the ELI scheme will expand employment even while improving job quality, providing social security coverage through EPFO, and making it easier for fresh graduates and workers to transition into formal, stable careers.
