A long-awaited, unprecedented scheme for the country’s youth was approved on July 1. The Union Cabinet, led by Prime Minister Narendra Modi, approved the Employment Linked Incentive Scheme (ELI). Under this scheme, the government will provide an amount equivalent to one month’s salary to approximately 19.2 million youth. The central government has allocated a massive budget of ₹99,446 crore for this employment incentive scheme, which will directly benefit first-time job seekers in the form of ₹15,000.
What is the Employment Linked Incentive Scheme (ELI Scheme)
The Modi government announced a significant incentive scheme for youth in the last budget. Under this employment-linked incentive scheme, the government announced financial incentives for first-time job seekers. The Central Government had proposed providing this ₹15,000 bonus to first-time job seekers separately from their salary, which has now been approved by the Cabinet.
This scheme is a key part of PM Modi’s five-point package, which aims to provide employment, skill development, and other benefits to a total of 41 million youth. The total budget for this entire package is ₹2 lakh crore. The primary objective of the ELI scheme is to create a skilled workforce for the country’s future and encourage youth to seek employment.
Incentives for the Employee and the Company
The Employment-Linked Incentive Scheme has two main components that make it beneficial. The financial benefit for the employee is that they will receive a direct benefit of ₹15,000 upon joining a job for the first time. This amount will be disbursed in two installments, not in one lump sum.
The incentive for the company is that it will also receive government funding for each employee. Each employee earning up to ₹1 lakh will receive a benefit of up to ₹3,000 from the central government. For employees earning ₹10,000 or less, this money will be given proportionately.
The monthly benefit to the company based on the EPF slab is as follows: ₹1,000 for salaries up to ₹10,000, ₹2,000 for salaries between ₹10,000 and ₹20,000, and ₹3,000 for salaries between ₹20,000 and ₹1,00,000.
Scheme Eligibility, Conditions, and Funding Method
To benefit from the ELI scheme, certain prerequisites and eligibility criteria must be met. Employee eligibility criteria for the scheme are that any young person joining a job for the first time in the country is eligible. An employee’s salary must not exceed ₹1 lakh per month. Only employees joining the EPFO (Employees’ Provident Fund Organization) for the first time will receive the benefit, and the employee must have worked for at least six months.
The eligibility criteria for companies are that they must be registered with the EPFO. If the company has fewer than 50 employees, it must hire at least two new employees, and if they have more than 50 employees, it must add at least five new employees. Most importantly, new employees must have worked for the company for a period of six months.
When will the ELI scheme funds be received
The ELI scheme funds will be disbursed in two installments. The first installment will be given after completing 6 months of employment, and the second installment will be given after completing 12 months and the Financial Literacy Program. A portion of this money will be deposited into the PF account, which can be withdrawn later.
Documents Required for the Scheme
A joining letter from the company, EPFO UAN number, Aadhaar card, and bank account passbook linked to the Aadhaar card are required.
How will the money be credited to your account
Under the Central Government’s ELI scheme, you will be eligible as soon as your EPF account is opened. You don’t need to fill out any separate form. The Central Government will automatically transfer the incentive amount to the bank account linked to your Aadhaar card through DBT (Direct Benefit Transfer).