New Employment Linked Incentive Schemes

General Discussions
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Hello HR Professionals,

I wanted to reach out regarding the recently introduced Employment Linked Incentive Schemes from this year’s budget, part of the Prime Minister’s Package for Employment Growth. These schemes seem tailored to support first-time employees, incentivize manufacturing job creation, and encourage workforce expansion by offering various subsidies.

To summarize:

Scheme A provides a subsidy (up to ₹15,000) in installments for first-time employees.
Scheme B incentivizes manufacturing sector growth with a tiered subsidy over four years.
Scheme C offers quarterly reimbursements to companies that expand their workforce by a certain number of employees.

For those of you who have looked into this or started the application process, could you share insights on eligibility requirements, documentation, and the steps for companies to apply?

Thanks in advance for any advice!

Press Release

Budget 2024: New employment-linked incentives for employees, employers

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kindly explain this scheme and how can be take benefit from this schemes as a employee or employer

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Hi,

As of now, the Employees’ Provident Fund Organisation (EPFO) has issued a circular dated November 22, 2024, titled "UAN Activation and Seeding Bank Account with AADHAAR for availing the benefits under ELI Scheme" (ELI/UAN Activation/2024). This circular emphasizes the necessity for employers to ensure that their employees’ Universal Account Numbers (UAN) are activated and linked with Aadhaar to facilitate access to benefits under the Employment Linked Incentive (ELI) Scheme.

The ELI Scheme, introduced in the Union Budget 2024-25, comprises three components:

  1. Scheme A: Provides a one-month wage (up to ₹15,000) in three installments to first-time employees registered with EPFO, with an eligibility limit of a salary up to ₹1 lakh per month.
  2. Scheme B: Incentivizes job creation in the manufacturing sector by offering benefits based on EPFO contributions during the first four years of employment for first-time employees earning up to ₹1 lakh per month.
  3. Scheme C: Supports employers by reimbursing up to ₹3,000 per month for two years towards their EPFO contribution for each additional employee with a salary up to ₹1 lakh per month.

To maximize participation in the ELI Scheme, the Ministry of Labour & Employment has directed EPFO to collaborate with employers to ensure UAN activation through Aadhaar-based OTP for all employees joining in the current financial year by November 30, 2024. This initiative aims to streamline access to EPFO’s online services, including provident fund account management and claim submissions.

Employers are advised to prioritize the activation of UANs and the seeding of bank accounts with Aadhaar to enable employees to fully benefit from the ELI Scheme. For detailed information, please refer to the EPFO circulars available on their official website.

Regards,
Bhuvana Anand

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Thanks @Bhuvana_Anand , its very helpful.

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Detailed summary and breakdown of the Employment Linked Incentive (ELI) Scheme approved by the Union Cabinet on 01 July 2025.

Overview of the ELI Scheme

The Employment Linked Incentive (ELI) Scheme is a nationwide initiative to:

  • Boost job creation across all sectors, with special emphasis on manufacturing
  • Support first-time employees entering the formal workforce
  • Provide social security benefits via EPFO registration
  • Enhance employability through financial literacy

Key Facts:

  • Outlay: ₹99,446 Crore
  • Duration: August 1, 2025 – July 31, 2027
  • Targeted Jobs: Over 3.5 Crore jobs
    • 1.92 Crore for first-time employees
    • 2.6 Crore via employer incentives

Part A – Incentive to First-Time Employees

Eligibility:

  • Salaried individuals registered with EPFO
  • Monthly salary up to ₹1 Lakh
  • New to the workforce

Incentive Structure:

  • One month’s EPF wage, capped at ₹15,000
  • Paid in 2 installments:
    • 1st installment after 6 months of continuous service
    • 2nd installment after 12 months + completion of a financial literacy programme
  • A portion of the incentive is locked in a savings instrument, promoting financial discipline

Disbursement: Through DBT using Aadhaar Bridge Payment System

Part B – Incentives to Employers

Objective: Encourage businesses to hire more people and offer sustained employment

Eligibility:

  • EPFO-registered establishments
  • Must add:
    • At least 2 additional employees (if < 50 employees)
    • At least 5 additional employees (if ≥ 50 employees)
  • Additional hires must be employed for at least 6 months
  • Employee salary: up to ₹1 Lakh/month

Incentive to Employers (per employee per month):

EPF Wage Slab --------------- Incentive to Employer
Up to ₹10,000 Up to ₹1,000*
₹10,001 – ₹20,000 ₹2,000
₹20,001 – ₹1,00,000 ₹3,000
  • Proportional incentive for wages under ₹10,000

Incentive Period:

  • 2 years for all sectors
  • Extended to 4 years for the manufacturing sector

Disbursement: Payments made to PAN-linked accounts of employers

Strategic Outcomes

  • Encourage hiring of first-time jobseekers
  • Incentivize formalization of employment through EPFO registration
  • Catalyze growth in manufacturing by extending incentives
  • Broaden social security coverage for youth
  • Complement the broader employment and skilling package from Union Budget 2024-25 (₹2 Lakh Crore for 4.1 Cr youth)

https://www.pmindia.gov.in/en/news_updates/union-cabinet-approves-employment-linked-incentive-eli-scheme/

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