ELI Scheme 2025: The Employment Linked Incentive (ELI) Scheme 2025 is a major initiative approved by the Union Cabinet to support job creation, enhance employability, and strengthen social security across India. Launched with a focus on manufacturing and formal employment, this scheme offers compelling incentives to both first-time employees and employers. Over the next two years, the ELI Scheme aims to generate more than 3.5 crore jobs and benefit nearly 1.92 crore fresh entrants into the workforce. Let’s explore how this initiative works and what it means for India’s youth and industries.
ELI Scheme 2025
The Employment Linked Incentive (ELI) Scheme is a two-part program introduced in the Union Budget 2024–25 as a cornerstone of a ₹ 2 lakh crore employment package. With an outlay of nearly ₹ 1 lakh crore, the scheme incentivizes both hiring and formal employment through EPFO, offering structured benefits to first-time salaried workers and to employers who increase their workforce.
| Affected Period | Jobs created between 1 August 2025 and 31 July 2027 |
| Total Budget | ₹ 99,446 crore |
| Target Employment | Over 3.5 crore jobs |
| First-Time Employees (Part A) | 1.92 crore beneficiaries |
| Employer Support (Part B) | Job creation, especially in manufacturing |
| Salary Ceiling | Up to ₹ 1 lakh/month EPF wages |
| Employee Incentive | 1 month’s EPF wage capped at ₹ 15,000 in two instalments |
| Employer Incentive | Up to ₹ 3,000/month per additional employee for 2 years (extendable to 4 years in manufacturing) |
Part A: Incentives for First-Time Employees
Under Part A, individuals who secure their first salaried job and are registered with the Employees’ Provident Fund Organisation (EPFO) can receive an incentive equivalent to one month’s EPF wage, up to ₹ 15,000. This is disbursed in two parts:
- After six months of continuous employment.
- After twelve months of employment and completion of a financial literacy course.
To promote savings, a portion of this incentive will be fixed in a deposit account and withdrawable later. Eligibility applies for EPF wages up to ₹ 1 lakh per month (EPF India).
Part B: Incentives for Employers
Part B encourages employers to expand their workforce. Firms registered with EPFO can earn monthly incentives of up to ₹ 3,000 for each new employee, provided certain conditions are met:
- For small establishments (under 50 employees): Hired at least 2 additional workers and retained them for 6 months.
- For larger firms (50+ employees): Added a minimum of 5 extra employees and retained them.
The incentive rates vary based on EPF wage slabs:
- Salaries up to ₹ 10,000/month: ₹ 1,000 incentive
- ₹ 10,000–₹ 20,000/month: ₹ 2,000 incentive
- ₹ 20,000–₹ 1 lakh/month: ₹ 3,000 incentive
Manufacturing firms can receive incentives beyond the initial two years, extending to four years (EPF India).
Why the ELI Scheme Matters
This scheme aims to formalize the workforce by encouraging both job creation and accountability through EPFO registration. It benefits the economy through:
- Enhanced Employability: New job seekers receive financial incentive and training.
- Stronger Social Security: EPF coverage increases, benefiting both employees and employers.
- Industry Growth: Particularly in manufacturing, firms receive extended support to retain staff.
How Funds Are Disbursed
Payments under Part A go directly to employees via the Aadhaar Bridge Payment System, ensuring speed and transparency. Under Part B, incentives are credited directly to employers’ PAN-linked bank accounts (EPF India).
Who Can Benefit?
The ELI Scheme is open to:
- First-time employees registered with EPFO and earning up to ₹ 1 lakh/month.
- Employers who are EPFO-registered and create additional net jobs in any sector (with a focus on manufacturing).
FAQs
A first-time employee is anyone registering for the first time with EPFO and drawing a salary up to ₹ 1 lakh/month.
The incentive is split into two instalments: one after six months of employment and the second after twelve months and financial literacy training, via the Aadhaar-linked payment system.
Employers must be EPFO-registered, hire additional employees (minimum thresholds apply), maintain their employment for at least six months, and salaries must be within the capped range.
The scheme targets jobs generated from 1 August 2025 to 31 July 2027. With approximately ₹ 99,446 crore allocated, it aims to create formal employment for over 3.5 crore individuals and incentivize close to 2.6 crore new employee hires (EPF India).
For young professionals and businesses alike, the ELI Scheme 2025 represents a meaningful step toward stronger job growth and enhanced social security across India.
