The government’s new ₹1 lakh crore Employment-Linked Incentive (ELI) scheme will provide direct cash benefits to first-time workers and financial support to employers who create sustained new jobs, according to Vandana Gurnani, Secretary, Ministry of Labour & Employment, in an exclusive interview with CNBC-TV18.“With this scheme, people will enter the job market. Employers are often hesitant to hire fresh joinees but with this scheme’s support, they can,” Gurnani said. “We aim to improve skilling and productivity and enable long-term employment.”
The ELI scheme, approved by the Union Cabinet earlier this week, will go live on August 1 and remain open for registration until July 2027. It will be open to all sectors, with manufacturing receiving incentives for a longer duration—four years instead of two. Labour-intensive sectors such as micro, small and medium enterprises (MSMEs), textiles, electronics, IT, and food processing are expected to benefit the most.
The scheme has two components — Scheme A for first-time employees and Scheme B for employers hiring new workers.Scheme A offers direct benefit transfers of up to ₹15,000 in two instalments to first-time workers earning up to ₹1 lakh per year. The amount will be credited directly to their Aadhaar-linked bank accounts. “Scheme A is only for the employees,” Gurnani said. “It provides social security, financial literacy, and inclusion in the EPFO net, which means pension, provident fund, and insurance.”Scheme B supports employers by offering ₹3,000 per employee per month for two years. Employers with fewer than 50 workers must hire at least two new employees, while those with over 50 must hire five. Payments will be made only after six months of continuous employment. “This ensures that there is sustained employment, skilling, and a productivity increase,” Gurnani said.She also indicated that internship programmes may be linked to the scheme in future to support smoother transitions into formal employment. “There has certainly been discussion on this, and more discussions will follow,” she said.Gurnani added that ELI is part of a broader employment-focused package, which includes Cabinet approval for upgrading Industrial Training Institutes (ITIs) and setting up five Centres of Excellence to meet emerging skill demands.On the onboarding process, Gurnani highlighted its simplicity. “Nobody has to really apply. For companies already on the EPFO database, it’s just a matter of providing a GST number and a PAN-linked bank account,” she said. For employees, face authentication via the UMANG app and an Aadhaar-linked bank account is sufficient.To prevent misuse, strong safeguards have been built in. “Payments will be made only after six months of EPFO contribution and submission of Electronic Challan cum Return (ECR) filings,” Gurnani said. “The money goes only into Aadhaar-linked bank accounts of employees and PAN-linked accounts of employers. That’s another layer of protection.”Watch the accompanying video for more
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