Employment Linked Incentive Scheme

Recently, the Secretary of the Ministry of Labour & Employment (MoLE), led an inter-ministerial meeting to discuss the Employment Linked Incentive Scheme.

• Focus Areas: There was discussion on the framework for effective implementation of the ELI scheme.

Key Points from the Meeting

• Three ELI Schemes: These three schemes will be based on enrolment in the Employees’ Provident Fund Organisation (EPFO). 
  • It will focus on first-time employees and supporting both employees and employers.

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About Employment Linked Incentive Scheme

• This initiative was launched in the Union Budget 2024-25.
• Aim: To generate employment and formalisation of the labour force in the country.

• Schemes Under Employment Linked Incentive

  • Scheme A:
    • Target: First-time employees in the formal sector registered with EPFO.
    • Benefit: One-month wage (up to Rs. 15,000) in three instalments.
  • Scheme B:
    • Focus: Job creation in manufacturing.
    • Incentive: Benefits for additional employment of first-time employees based on EPFO contributions for the first four years.
    • Eligibility: Employees with salaries up to Rs. 1 lakh.
  • Scheme C:
    • Support: Reimbursement to employers.
    • Benefit: Up to Rs. 3,000 per month for two years towards EPFO contribution for each additional employee with a salary of up to Rs. 1 lakh.

Importance of the Employment Linked Incentive Scheme

• Diversified opportunity: Offers a great opportunity for different sectors to formalize their workforce.
• Ensures social security for employees.

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