NEWS – The Union Cabinet approved the ₹99,446 crore Employment-Linked Incentive (ELI) scheme to boost job creation, especially in manufacturing

HIGHLIGHTS

• Employers will receive incentives for hiring additional workers, with benefits lasting up to two years, extended to four years for manufacturing
• First-time employees will receive one month’s wage (up to ₹15,000) as a direct benefit
• The scheme targets the creation of over 3.5 crore jobs between August 1, 2025, and July 31, 2027, including 1.92 crore first-time workers
• Applicable for employees with monthly salaries up to ₹1 lakh; employers will get up to ₹3,000/month for each new hire
• Part of a larger ₹2 lakh crore package announced in the 2024-25 Union Budget to benefit 4.1 crore youth through five schemes
• Focuses on incentivising sustained employment of at least six months per hire
• Aims to enhance youth employment by strengthening industry participation in workforce expansion
• While industry has welcomed the move, trade unions like CITU criticized it as favouring employers over workers
• The policy aligns with the government’s broader strategy to promote skilling, employment, and economic growth through fiscal support