India Approves ₹1 Lakh Cr ELI Scheme to Create Over 3.5 Crore Jobs by 2027
The Union Cabinet, chaired by Prime Minister Narendra Modi, has cleared the Employment Linked Incentive (ELI) Scheme, a two‑year mission designed to accelerate job creation, boost employability and widen social security coverage across India. Backed by a budget of ₹99,446 crore, the scheme promises to help companies add more than 3.5 crore formal jobs between 1 August 2025 and 31 July 2027, with a special push for the manufacturing sector. ELI is part of the larger ₹2 lakh‑crore employment and skilling package announced in the Union Budget 2024‑25 to open opportunities for 4.1 crore young Indians.
ELI has two inter‑linked components. Part A rewards first‑time employees who register with the Employees’ Provident Fund Organisation. Anyone joining the formal workforce on a salary of up to ₹1 lakh a month will receive a one‑month EPF wage, capped at ₹15,000, in two instalments: the first after six months of continuous service and the second after completing a year and a short financial‑literacy module. To cultivate a habit of saving, a slice of this benefit will be parked in a fixed‑deposit–style account that can be withdrawn later. The government expects about 1.92 crore newcomers to qualify for this direct support.
Part B incentivises employers in every sector, while offering an extra nudge to factories. Establishments registered with EPFO must add at least two net new workers if their headcount is below 50, or five if it is 50 or more, and retain them for six months to qualify. For each additional employee earning up to ₹1 lakh a month, the government will transfer up to ₹3,000 per month straight into the employer’s PAN‑linked account for two years. In manufacturing, the incentive continues into the third and fourth years to encourage long‑term job stability. Wage‑based slabs ensure smaller salaries receive proportionately higher support.
By coupling direct assistance for young entrants with targeted subsidies for employers, the Employment Linked Incentive Scheme seeks to speed up job generation, formalise the labour market and extend provident‑fund and other social‑security protections to millions. The government believes the measure will not only energise the manufacturing sector but also strengthen India’s overall economic recovery by putting more secure incomes in the hands of its citizens. Payments to beneficiaries will flow through Aadhaar‑linked direct benefit transfer systems, ensuring transparency and speed.
Source: PIB
