SARKARI SCHEMES EMPLOYMENT LINKED INCENTIVE SCHEME

 SARKARI SCHEMES EMPLOYMENT LINKED INCENTIVE SCHEME

The Employment Linked Incentive (ELI) Scheme is a government initiative announced in the Union Budget 2024-25 in India. It aims to boost job creation and formalize the workforce by providing financial incentives to both employers and employees. The scheme is a part of a larger package for youth employment and has a significant budget outlay.

Here's a breakdown of the key components of the ELI scheme:

1. Three Schemes under ELI:

• Scheme A: Incentive for First-Time Employees: This part of the scheme targets individuals entering the formal workforce for the first time.

  • Benefit: Eligible first-time employees registered with the Employees' Provident Fund Organisation (EPFO) will receive a one-month EPF wage, capped at ₹15,000, in two installments.

  • Eligibility: Employees with a monthly salary up to ₹1 lakh are eligible. They must be enrolled with EPFO and have their Aadhaar linked to their UAN and bank account.

  • Conditions: The first installment is paid after six months of continuous EPFO-enrolled employment, and the second is paid after 12 months, contingent on completing a financial literacy course.

• Scheme B: Job Creation in Manufacturing: This scheme is specifically designed to incentivize employers in the manufacturing sector to expand their workforce.

  • Benefit: Incentives are provided to both employers and first-time employees based on their EPFO contributions for the first four years of employment.

  • Eligibility: Employers must have a three-year track record with the EPFO and must hire a specific number of new employees. The employees must have a monthly salary up to ₹1 lakh (though the subsidy is calculated on a capped amount).

  • Duration: The benefits run for four years if the employee is retained.

• Scheme C: Support to Employers (All Sectors): This part of the scheme supports employers in all sectors who are looking to grow their workforce.

  • Benefit: The government will reimburse employers with an amount of up to ₹3,000 per month for a period of two years for each additional employee they hire and retain for at least six months.

  • Eligibility: The employer must be registered with the EPFO and hire a specific number of additional employees (e.g., at least two for employers with fewer than 50 employees, or at least five for employers with 50 or more employees). The monthly salary of the new employee must be up to ₹1 lakh.

  • Duration: The incentive is provided for two years, with an extension to the third and fourth years for employers in the manufacturing sector and for those who create over 1,000 jobs.

Key Aims and Features:

• Boosting Formal Employment: The scheme aims to encourage the transition from informal to formal employment by providing social security benefits through EPFO registration.

• Targeting Youth: A significant focus is on supporting first-time employees and young people entering the workforce.

• Focus on Manufacturing: The scheme provides extended benefits to the manufacturing sector to stimulate growth and job creation in this area.

• Direct Benefit Transfer (DBT): Payments to eligible employees are made through DBT, ensuring transparency and efficiency.

• Timeline: The scheme is applicable for jobs created between August 1, 2025, and July 31, 2027.