The Union Cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the much-awaited Employment-Based Incentive (ELI) scheme included in the 2024-25 budget. Under this scheme, new appointments in the private sector will be given one month’s salary, as well as financial assistance to the companies employing them. Its objective is to increase employment opportunities in the country and improve the skills of working youth.
Information and Broadcasting Minister Ashwini Vaishnav said that under this scheme, a target has been set to create 3.5 crore new jobs in the next two years. 1.92 crore first-time job seekers will be given direct financial assistance of up to ₹ 15,000 in two installments. The Cabinet has approved a budget of ₹ 99,446 crore for this scheme.
Companies included in this scheme will get a cash incentive of ₹ 3000 for every new employee for two years. At the same time, companies in the manufacturing sector will get this benefit for four years. The scheme is part of the Prime Minister’s Employment and Skill Development Package, which aims to provide employment opportunities for about 4.1 crore job seekers in the long term, with a total budget of ₹2 lakh crore.
According to the government’s Economic Survey 2024, India will have to create 78.5 lakh non-agricultural jobs per year by 2030, which is much higher than the current employment generation rate.
Under one part of the scheme, all first-time job seekers will be given direct benefits equivalent to one month’s salary, with a maximum limit of ₹1 lakh salary. The second part of the scheme is based on employers contributing a part of the salary.
Under the scheme, companies with less than 50 employees will have to hire two new employees to become eligible for incentives. Companies with more than 50 employees will have to add five new employees. Registration of all employees with the Employees’ Provident Fund Organisation (EPFO) is mandatory.
The incentives based on salary have been determined as follows:
₹1,000 for employees with salary up to ₹10,000
₹2,000 for employees with salary from ₹10,000 to ₹20,000
₹3,000 for employees with salary from ₹20,000 to ₹1 lakh
The scheme will apply to jobs created between August 1, 2025 and July 31, 2027. Vaishnav said the main objective of the scheme is to provide employment opportunities for freshers across the country, especially in the manufacturing sector.
Earlier, Labor Minister Mansukh Mandaviya had said that the government will ensure through AI techniques and strict monitoring mechanisms that companies do not take advantage of the scheme by declaring old employees as new. The Ministry of Corporate Affairs will prepare the list of companies participating in the scheme, while the Ministry of Labor has finalized the proposals of the scheme.
