Employment Linked Incentive (ELI) Scheme

A new push for employment growth

The Union Cabinet has approved the Employment Linked Incentive (ELI) Scheme to support job creation, strengthen employability, and expand social security across all India. This initiative is designed to empower both employers and employees by offering targeted financial incentives to encourage workforce expansion. The scheme covers all the sectors, including services and manufacturing, with additional benefits extended to the manufacturing sector.

Key features of the scheme:

  • Benefits will apply to jobs created between 1 August 2025 and 31 July 2027.
  • Total planned outlay under the scheme: INR 99,446 crore.
  • Expected jobs to be created: 3.5 crore.

Employment scheme snapshot:

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Scheme A - Incentives for first-time employees

Eligibility

  • Targets first-time employees registered with EPFO and salaries up to INR 1 lakh per month.

Incentive structure

  • Offers one month’s EPF wage (up to INR 15,000), paid in two instalments:
    • First instalment after six months of service.
    • Second instalment after 12 months of service and successful completion of a financial literacy programme.

Mode of payment

  • Payment credited directly to the employee via Direct Benefit Transfer (DBT).

Scheme B - Incentives for employers

Eligibility

  • Employers registered with EPFO.
  • Hiring new employees with salaries up to INR 1 lakh per month.

Incentive structure

  • Monthly incentives of up to INR 3,000 per additional employee.
  • Employee must be retained for at least 6 months.
  • Sector-wise incentives:
    • Non-manufacturing sector (including services): Up to INR 72,000 per eligible employee over 2 years .
    • Manufacturing sector: Up to INR 1,44,000 per eligible employee over 4 years.
  • Monthly incentives by wage slabs:
    • EPF wage of employee Monthly incentive to employer
    Up to INR 10,000 Up to INR 1,000*
    INR 10,001 – 20,000 INR 2,000
    INR 20,001 – 1,00,000 INR 3,000

Mode of payment

  • Payment directly to the employer’s PAN-linked bank account.

*Note: Incentive is proportional for EPF wages up to INR 10,000/.

The detailed implementation guidelines and framework for the ELI Scheme are awaited. To understand how this scheme could impact your organisation, we encourage you to connect with our experts.

We are also hosting an interactive webinar on 8 July to help businesses decode the ELI Scheme and plan their workforce strategies effectively.

Register now