The government on Tuesday approved the Employment Linked Incentive scheme, a ₹99,446 crore ($11.9 billion) plan to create more than 3.5 crore jobs over two years, with targeted benefits for first-time workers and a push for employment in the manufacturing sector.

The scheme, which was part of the 2024-25 Union Budget, aims to improve employability, formalize the workforce and extend social security coverage.

It includes direct benefits for employees entering the workforce for the first time and incentives for employers hiring additional workers, particularly in the manufacturing sector.

Incentives for First-Time Employees

Under Part A of the scheme, first-time workers registered with the Employees’ Provident Fund Organisation will receive one month’s wage — up to ₹15,000 — in two installments. Employees with monthly salaries up to ₹1 lakh will be eligible.

The first installment will be released after six months of continuous employment, and the second after 12 months and completion of a financial literacy course. Part of the incentive will be retained in a savings account for future withdrawal, encouraging savings habits.

Officials said nearly 1.92 crore individuals entering formal employment for the first time are expected to benefit from this component.

Employer Incentives Target Manufacturing

Part B of the scheme will provide incentives to employers creating additional jobs across all sectors, with enhanced benefits for the manufacturing industry.

Employers hiring workers with salaries up to ₹1 lakh per month will be eligible for incentives of up to ₹3,000 per employee per month for two years. For manufacturing companies, this support will be extended for four years.

To qualify, companies must be EPFO-registered and show sustained hiring, at least two new employees for businesses with fewer than 50 workers, and five or more for those employing 50 or more.

Incentives will be disbursed based on wage brackets:

  • Up to ₹10,000: ₹1,000/month
  • ₹10,001–20,000: ₹2,000/month
  • ₹20,001–1 lakh: ₹3,000/month

This part of the scheme is projected to create 2.6 crore additional jobs, government estimates showed.

Payment Mechanism

Payments to first-time employees will be made through the Aadhaar-enabled Direct Benefit Transfer system, while employer incentives will be credited to PAN-linked accounts.

The government stated that the ELI scheme is a major step toward employment generation, especially in the manufacturing sector, while formalizing a large segment of India’s workforce.

The initiative is part of a broader employment and skilling push targeting 4.1 crore youth with a combined budget of ₹2 lakh crore.