EMPLOYMENT-LINKED INCENTIVE (ELI) SCHEME

The Union Cabinet approved the ₹99,446 crore Employment-Linked Incentive (ELI) scheme to create over 3.5 crore jobs, primarily in manufacturing. The scheme provides one month's wage to first-time employees and incentives to employers for up to four years, promoting employment, social security, and economic growth. Trade unions, however, view it with suspicion.

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The Union Cabinet approved the Employment-Linked Incentive (ELI) Scheme, with the allocation of ₹99,446 crore.

About Employment-Linked Incentive (ELI) Scheme

The ELI Scheme was initially announced in the Union Budget 2024-25 as one of five schemes under the Prime Minister's package, which has a total budget outlay of ₹2 lakh crore dedicated to employment, skilling, and other opportunities for 4.1 crore youth.

Sectoral Focus => While it aims to enhance employability and social security across all sectors, it places a special emphasis on the manufacturing sector.

The Prime Minister stresses that the scheme will boost job creation and greatly benefit youth, especially with its focus on manufacturing and incentives for first-time employees. The Labour Minister states the scheme targets creating jobs for 3.5 crore youth.

Key Features and Incentives

The ELI Scheme provides distinct incentives for both first-time employees and employers creating new jobs.

For Employees (First-Timers)

Financial Incentive => First-time employees entering the workforce receive one month's wage, capped at ₹15,000.

Eligibility => Employees with salaries up to ₹1 lakh are eligible for this benefit.

Disbursement Schedule:

  • The first installment is payable after six months of service.
  • The second installment is payable after 12 months of service and upon the employee's completion of a financial literacy program.

Target Beneficiaries => The scheme anticipates 1.92 crore first-time beneficiaries out of the total projected jobs.

For Employers

Monthly Incentive => The government incentivizes employers with up to ₹3,000 per month for each additional employee.

Sustained Employment Condition => This incentive is provided for employees who maintain sustained employment for at least six months.

Duration of Incentive:

  • For non-manufacturing sectors, employers receive incentives for a period of two years.
  • For the manufacturing sector, the incentives are extended for another two years.

The benefits of the scheme apply to jobs created between August 1, 2025, and July 31, 2027. With an outlay of ₹99,446 crore, the ELI Scheme aims to incentivize the creation of more than 3.5 crore jobs over two years

Must Read Articles: 

India Employment Trends and Statistics

India Employment Report 2024 

Source: 

THE HINDU

PRACTICE QUESTION

Q. India's demographic dividend presents both an unparalleled opportunity and a significant challenge in terms of employment generation. Critically analyze. 250 words. 

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