Employment Linked Incentive (ELI) Program | Boost Jobs & Growth
The Employment Linked Incentive (ELI) Scheme is a major government program in India that aims to boost formal employment. The goal is to help new employees get used to the formal job market and to encourage businesses to hire more people. The program gives money to both workers who start working in the formal sector for the first time and employers who make new jobs. The Cabinet approved the program in July 2025 after it was proposed in the Union Budget for 2024–2025. It is expected to create more than 35 million new jobs across the country. The ELI Scheme is one of the largest job programs ever started in India, with an investment of about ₹1 lakh crore.
What the Employment Linked Incentive ( ELI ) Scheme wants to do
The ELI Scheme has three main goals:
- Make formal jobs: The program will create more than 35 million formal jobs in two years.
- Support new hires: It gives people who are starting their first real job direct financial help.
- Encourage manufacturing: Employers in the manufacturing sector can get extra benefits and a longer period of time to take advantage of them.
The Scheme’s Structure
The ELI Scheme has two parts:
Section A: Benefits for New Employees
This part gives people who sign up for the Employees’ Provident Fund Organisation (EPFO) and start working for the first time a direct financial incentive.
Part B: Benefits for Businesses
This part gives employers who hire new workers monthly bonuses. The goal is to get employers to hire more people by making it financially appealing.
Employee Eligibility Requirements (Part A)
To be eligible for
Part A benefits, a person must:
- be getting paid for the first time.
- have a valid Universal Account Number (UAN) and be registered with the EPFO.
- have a bank account linked to your Aadhaar.
- Earn up to ₹1 lakh a month.
- Stay with the same company for at least a year.
- Complete a training module on basic money management (for the second set of benefits).
- Employers (Part B)
To be eligible for Part B, an employer must:
Sign up with EPFO.
- Add a minimum number of new employees based on the size of the business:
- If the company had fewer than fifty employees, it had to hire at least two new ones.
- If the company had fifty or more employees, it had to hire at least five more.
- Make sure that the new employees make at least ₹1 lakh a month and are registered with the EPFO.
- To get bonuses, every new hire must stay on for at least six months.
- Manufacturing businesses must have paid into the EPFO for at least three years in a row.
- You must hire at least 50 new people or 25% of the people who already work there, whichever is less.
- Benefits are only available to manufacturers, and they can last for up to four years instead of two.
Amounts of Employee Incentives (Part A)
- Qualified employees will get a one-time bonus equal to one month’s EPF salary, up to a maximum of ₹15,000. This amount will be paid in two parts:
- First payment: After six months of continuous work covered by EPFO.
- Second payment: after a year and training in how to manage money.
- A part of the second installment will be put into a savings-linked account to help people stick to their budgets in the long term.
Employers (Part B)
- Employers will get bonuses every month for every new hire, depending on how much they pay them:
- Incentives for Salary Slabs ₹0–₹10,000 a month; ₹1,000–₹10,000 a month; ₹2,000–₹20,000 a month; ₹3,000–₹1,00,000 a month;
- Time Frame for Incentives: Incentives for most sectors will only be paid for up to two years.
- In the manufacturing sector, incentives are good for up to four years.
- For example, a manufacturing company that hires 100 new workers and pays them ₹15,000 a month can get incentives of ₹3,000 per worker for up to four years, or ₹1.44 crore.
How to Get Jobs
- Work for a company that is registered with the EPFO.
- Make sure your UAN is up to date and that you are registered with the EPFO.
- Link your Aadhaar to your bank account.
- To get the first payment, you need to stay employed for at least six months.
- You need to finish a financial literacy module and work for 12 months straight to get the second payment.
- Once the requirements are met, the benefit is automatically credited, so there is no need to fill out a separate application.
For Businesses
- By registering with EPFO, you can make sure that all new hires are part of the Employee Provident Fund (EPF).
- Hire the fewest new employees you need based on the size of your current workforce.
- New hires must stay with the company for at least six months before applying for the incentive.
- You can submit incentive claims through the EPFO online portal by using credentials linked to your PAN.
- Keep accurate records of your job, pay, and EPF contributions.
- If an employee quits before the full 12-month period is up, they must return the incentive.
Watching and Paying
- The EPFO system watches over the whole plan.
- The Aadhaar-enabled bank account and Direct Benefit Transfer (DBT) are used to pay employees.
- The company’s PAN-linked bank account gets the employer’s incentives.
Benefits of the Employment Linked Incentive ( ELI )
Program for Workers:
- It gives money to people who are starting their first job.
- helps people keep their jobs and have stable careers.
- helps people learn how to save money and become more financially literate.
- Adding workers to the EPF system increases social security.
- For businesses, it lowers the cost of hiring new employees.
- helps businesses grow and create jobs, especially in manufacturing and small and medium-sized businesses (MSMEs).
- gives companies long-term benefits when they keep their workers.
- makes people more likely to follow EPF rules and labor laws.
Start Year of the Scheme: 2025 Employment Linked Incentive ( ELI )
- Start of Implementation: August 1, 2025
- Eligibility Period: August 1, 2025, to July 31, 2027
- Benefit Extension for the Manufacturing Sector: Until July 31, 2029
Important Information on Employment Linked Incentive ( ELI )
- If an employee leaves the company or is laid off before the 12-month mark, the incentive must be paid back.
- Only new hires get incentives.
- The monthly salary cap of ₹1 lakh applies to both employer and employee incentives.
- People who are self-employed or work for a company that doesn’t have EPFO coverage can’t apply for the program.
11. Problems and Comments Monitoring:
It can be hard to keep track of changes in employment and make sure they are followed.
- Employee Retention: Employers must make sure that workers stay for at least 12 months in order to keep the subsidy.
- Limited Scope: Only employees who are covered by EPF are covered; informal and gig workers are not.
- Administrative burden: Small businesses may not be able to handle the process, especially the paperwork and monthly reports.
Questions and Answers, or FAQs
Q1. Who can apply for the ELI Scheme?
Part A covers first-time salaried employees, while Part B covers employers who hire new employees.
Q2. Do I, as an employee, need to send in an application separately?
No. The benefit will automatically go to you once you are hired under EPFO and meet all the requirements.
Q3. If I’ve worked before but never had EPF, can I still get the benefit?
Yes. If this is your first time signing up with EPFO, you are eligible.
Q4: What will happen if I leave my job before the 12-month mark?
You won’t get the second payment of the benefit, and your employer may have to pay you back for any bonuses you’ve already received.
Q5. What forms do I need?
For workers, they need their bank account information, Aadhaar, and EPF registration (UAN).
Employers: PAN, EPFO registration, and payroll records.
Q6: Can gig workers and private contractors apply?
No. Only employees who are officially paid by EPFO are eligible for the program.
Q7. How will people learn about money management?
The government will offer a basic training module, either online or in partnership with employers.
