New Delhi: With effect from 1 August 2025, the Government of India will launch an Employment-Linked Incentive (ELI) programme with the express aim of encouraging job creation and promoting a skilled labour pool. With an allotment of 99,446 crore rupees ($11.8 billion), the program includes a reward of up to 99,446 rupees (SA15,000) to first-time workers, along with giving businesses subsidising their payroll a monthly financial reward. The plan is meant to meet the immediate labour-market demands and the reinforcement of the manufacturing industry as well as providing a systematic order to sustainable employment growth.
The ELI scheme is applicable to people who will be entering their working force between 1 August 2025 and 31 July 2027. Any employee who is reporting with the Employees’ Provident Fund Organisation (EPFO) for the first time with a salary per month up to 1 lakh (1 lakh = 100000 Indian Rupees, so 1 lakh = 1 lakh or 0000000000000001200) is a first-time employee. The incentive will be equal to the monthly EPFO contribution subject to a maximum of 15,000 and will be paid out in two payments: the first payment in six months and the second payment in one year, so long as the recipient undertakes a compulsory financial literacy training.
The involvement of the employers is just as important. The EPFO-registered businesses will be subsidised by 3,000/- a month per eligible worker whose salary is between 20,000/- a month and 100,000/- a month and that of any worker who earns less than 100,000/- per month. There are also certain new hiring rates that companies must meet this new rule: firms with less than 50 employees are required to onboard a minimum of two new employees, whereas those with 50 or more should get an overhaul of at least five. All employees have to stick with the company for at least six months in order to be considered eligible to receive the subsidy.
One of the strengths of the ELI scheme is also its simplified implementation. They do not have to pay any extra application fee; after the EPFO account of a particular employee is activated, and they contribute to the account regularly, after six months, the incentive is automatically transferred to their bank account. This highly effective device is developed to make life more accessible and effective for workers and employers.
The ELI scheme is a case in point of a focused programme to build employment and skills development in the wider picture of the Indian economic approach. Through the promotion of formal employment and the development of enterprises, the government aims at creating a strong, skilful labour force that can lead to the growth in key sectors, including manufacturing. With the launch of the programme, it is expected to give a much-needed boost to millions of youth in search of employment as well as businesses together.