ELI Scheme: There is great news for the youth. The Union Cabinet chaired by Prime Minister Narendra Modi has approved the ‘Employment Linked Incentive Scheme’. Now the government has taken another concrete step towards ending unemployment. This scheme will not only give the youth an opportunity to get a job but will also give financial incentives to companies for new hiring.
All new recruitments from 1 August 2025 to 31 July 2027 will get benefits under this scheme. This scheme with a huge budget of Rs 99,446 crore is expected to create more than 3.5 crore job opportunities in the country, out of which about 1.92 crore youth will step into the job for the first time.
What is the objective and scope of this scheme?
The ELI scheme is divided into two parts:
First part: Incentive for first time job holders- Employees joining EPFO for the first time will get incentives up to ₹ 15,000, that too in two installments. The first installment will be given on completion of 6 months of service and the second installment will be given on completion of 12 months of service along with passing the financial literacy program. A part of this will be locked in the savings account so that the youth also develop the habit of saving.
Second part: Incentives to companies on new recruitment- Companies will get incentives of up to ₹ 3,000 per month for every new employee. This benefit will be available for two years, while the manufacturing sector will get this benefit for 4 years. The company will have to retain the new employee for at least 6 months. Companies with less than 50 employees will have to hire at least 2 new people and those with more than 50 employees will have to hire 5 new people.
First time job seekers will get money transferred to their Aadhaar linked account via DBT. Companies will get the incentives in their PAN linked accounts.
When will the scheme start?
The benefit of this scheme will be available only on those recruitments which will take place between 1 August 2025 and 31 July 2027. That is, both companies and youth will get enough time to prepare.
The manufacturing sector will benefit the most from this scheme, where there are maximum job opportunities. To strengthen this sector, the government has decided to give incentives for four years. This will increase permanent employment on a large scale in factories and production units.
It is known that when Finance Minister Nirmala Sitharaman announced the Prime Minister’s Employment and Skilling Package in the budget for the financial year 2024-25, this ELI scheme was also announced. The government had kept a huge budget of Rs 2 lakh crore for this entire package.