Union Cabinet Approves ELI Scheme 2025





Date: July 1, 2025

The Union Cabinet has approved the Employment‑Linked Incentive (ELI) Scheme to boost formal job creation and incentivize hiring in India.

🎯 Key Highlights

  • Total outlay: ₹99,446 crore
  • Target jobs: 3.5 crore (35 million) jobs in 2 years
  • Implementation period: August 1, 2025 – July 31, 2027

🧩 Scheme Components

📌 Part A – Benefits for First-Time Employees

  • Eligible for employees joining EPFO for the first time
  • Monthly salary ≤ ₹1 lakh
  • Incentive: One month’s EPF wage (max ₹15,000)
  • Paid in 2 installments – after 6 and 12 months
  • A mandatory savings element to promote financial discipline
  • An estimated 1.92 crore first-time workers are to benefit

📌 Part B – Benefits for Employers

  • Incentive: ₹1,000–₹3,000/month per new EPFO-enrolled employee
  • Applicable to employees with a salary ≤ ₹1 lakh
  • Minimum new hires: 2 (if <50 employees) or 5 (if ≥50 employees)
  • Incentive duration: 2 years (4 years for the manufacturing sector)

💳 Payment Mode

  • Employees: Via Direct Benefit Transfer (DBT) using Aadhaar-enabled system
  • Employers: Credited to PAN-linked business bank accounts

📊 Summary Table

Component Target Group Incentive Value Duration
Part A (Employees) First-time EPFO entrants Up to ₹15,000 (in 2 installments) 12 months
Part B (Employers) Firms hiring new workers ₹1k–₹3k/month per employee 2 years (4 for manufacturing)

📌 Conclusion

This scheme is a major boost to formal job creation, particularly benefiting youth and MSMEs. It aligns with India's goal of enhancing social security, increasing EPFO coverage, and incentivizing businesses to expand their workforce.

🔗 Sources