Employment Linked Incentive Scheme: Key Components and Payment Process

Jul 11, 2025, 11:53 IST

Employment Linked Incentive Scheme: The Union Government has recently approved the Employment Linked Incentive (ELI) Scheme to support employment generation, enhance employability and social security across all the sectors. This article provides all the details related to the ELI Scheme.

Employment Linked Incentive Scheme
Employment Linked Incentive Scheme

Employment Linked Incentive Scheme: The ELI Scheme was announced in the Union Budget 2024-25 to facilitate employment, skilling and other opportunities. The scheme is launched to benefit both the employee and the employer. The benefit is for the first-time employee. They will get one month’s wage (up to ₹15,000) and the employer will be given incentives for a period of two years. The ELI Scheme is more focused on the manufacturing sector with the employers benefits being additional two years. The incentives will be provided for the jobs created between 01 August 2025 and 31 July, 2027.

Employment Linked Incentive Scheme Overview

The Employment Linked Incentive (ELI) Scheme is mainly focused on generation of employment in the manufacturing sector while including other sectors too. The scheme was announced in the Union Budget 2024-25. The scheme consists of two parts. Part A is related to the first-time employees and Part B is related to the employers. This scheme will come into effect from August 01, 2025.

What are the Key Components of the Employment Linked Incentive Scheme

The ELI Scheme has two components as Part A and Part B which are related to the first-time employees and the employers.
Key Components

  • Part A: Incentives for First-time Employees

    • First-time employees registered under Employees’ Provident Fund Organization (EPFO). The Part A will benefit around 1.92 crore first time employees.

    • They will get one month EPF up to ₹15,000 in two installments (after 6 and 12 months of service).

    • Those employees whose salaries are up to 1 lakh are eligible.

    • This scheme is also focused on increasing the saving habits of the employees by keeping a portion of the incentive that will be kept in a fixed deposit and can be withdrawn by the employee at a later date.

  • Part B: Incentives for the Employers

    • The employers will get an incentive of ₹3,000 per month for two years for  generating additional employment.

    • The incentive will be provided for employees whose salaries are ≤ ₹1 lakh.

    • For the manufacturing sectors, the incentive will be stretched for 3rd and 4th year as well.

    • The firms registered with EPFO must hire 2 additional employees (for firms with less than 50 employees) and 5 additional employees (for firms with more than 50 employees) with minimum sustainability of 6 months.

Incentive Payment Mechanism of ELI Scheme

The payments will be made through Direct Benefit Transfer under Part A of the scheme to the First Time employees. Payments to the Employers under Part B will be made directly into their PAN-linked Accounts.


Upasna Choudhary
Upasna Choudhary

Content Writer

Upasna Choudhry holds a Master’s degree in Forensic Chemical Sciences and has an extensive background in preparing for the UPSC Civil Services Examination. She currently contributes to the Exam Prep Section of Jagran Josh, where her passion for reading and writing shines through her work. Upasna specializes in creating well-researched and aspirant-centric content, simplifying complex topics, and providing strategic preparation insights. Her academic expertise and firsthand experience with competitive exams enable her to deliver valuable resources tailored to the needs of exam aspirants.

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FAQs

  • How may components are there in the ELI Scheme?
    +
    There are two components in the ELI Scheme. The Part A consists of Incentives to the first time employees and Part B consists of support to the employers.
  • What is Employment Linked Incentive Scheme?
    +
    The Employment Linked Incentive Scheme is to generate employment, employability by providing incentives to both the employees and the employers.

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