Employment Linked Incentive (ELI) Scheme in India : National Programme for Welfare of Employees & Employers

Central government has launched Employment Linked Incentive (ELI) Scheme on 23 July 2024. The 3 ELI schemes would be named as Scheme A, Scheme B and Scheme C under PM's package. PM ELI Scheme will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers. ELI Scheme in India is a national programme for the welfare of employees and employers. Read this article till the end to know complete details of Employment Linked Incentive Schemes in India.

Employment Linked Incentive (ELI) Schemes in India Overview

	Enrolment Duration (Years)	Expenditure Duration (Years)	Beneficiaries (lakhs)	Central Outlay (Rs. crore)
Employment Linked Incentive				
Scheme A: First Timers	2	3	210	23,000
Scheme B: Bulk Hiring of First Timers in Manufacturing	2	6	30	52000
Scheme C: Job Creation	2	6	50	32000
Internship Programme (Phase -1)	2	3	30	19,000
Internship Programme (Phase 2)	3 (Starting from third year)	4 (Starting from third year)	70	44,000
Upgradation of ITIs	N/A	5	20	30,000
Total			410	2,00,000

Schemes A, B, C - Employment Linked Incentive (ELI) Scheme

Central government will implement 3 schemes (Scheme A, Scheme B, Scheme C) for Employment Linked Incentive, as part of the Prime Minister's package. Here are the details of all 3 schemes under ELI initiative.

Scheme A: First Timers

• Scheme A will provide one-month wage to all persons newly entering the workforce in all formal sectors. 
• The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to Rs. 15,000. 
• The eligibility limit will be a salary of Rs. 1 lakh per month.
• Enrollment duration of Scheme A is 2 years. 
• The scheme is expected to benefit 2 crore 10 lakh youths.
• Central government will spend Rs. 23,000 crore on Scheme A for first timers.

Scheme B: Job Creation in Manufacturing

• Scheme B will incentivize additional employment in the manufacturing sector, linked to the employment of first-time employees. 
• An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first 4 years of employment. 
• The scheme is expected to benefit 30 lakh youth entering employment, and their employers.
• Enrollment duration of Scheme B is 2 years while expenditure duration is of 6 years. 
• Central government will spend Rs. 52,000 crore on Scheme B under ELI Scheme.

Scheme C: Support to Employers

• This employer-focussed scheme will cover additional employment in all sectors. 
• All additional employment within a salary of Rs. 1 lakh per month will be counted. 
• The government will reimburse to employers up to Rs. 3,000 per month for 2 years towards their EPFO contribution for each additional employee. 
• The scheme is expected to incentivize additional employment of 50 lakh persons.
• Enrollment duration of Scheme C is 2 years while expenditure duration is of 6 years. 
• Central government will spend Rs. 32,000 crore on Scheme C under ELI Scheme.

Note - First 3 schemes namely Scheme A, Scheme B, Scheme C are combined called as Employment Linked Incentive (ELI) Schemes. Some other schemes namely Scheme D and Scheme E are also launched as a part of employment and skilling initiative which we have described here. However, schemes D and E are NOT part of ELI schemes.

Also Read - Production Linked Incentive (PLI) Scheme in India 

Scheme D & Other Initiatives in Union Budget 2024-25

• Govt. to Facilitate Higher Participation of Women in the Workforce - Union govt. will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. In addition to this, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.
• Scheme D: Skilling Programme - Central govt. has announced a new centrally sponsored scheme, as the 4th scheme under the Prime Minister's package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over a 5-year period. 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of industry, and new courses will be introduced for emerging needs.
• Skilling Loans - The Model Skill Loan Scheme will be revised to facilitate loans up to Rs. 7.5 lakh with a guarantee from a government promoted Fund. This measure is expected to help 25,000 students every year.
• Education Loan e Voucher Scheme - Central govt. will help those youth who have not been eligible for any benefit under government schemes and policies. The union govt. will provide financial support for loans upto Rs. 10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3% of the loan amount.

Scheme E: PM Internship Yojana

As the 5th scheme under the Prime Minister’s package, our government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities. An internship allowance of Rs. 5,000 per month along with a one-time assistance of Rs. 6,000 will be provided. Companies will be expected to bear the training cost and 10 per cent of the internship cost from their CSR funds.

Enrollment duration for phase 1 of PM Internship Scheme is 2 years and 30 lakh youths would be provided internship with an outlay of Rs. 19,000 crore. On completion of Phase 1 implementation for two years, PM Internship Yojana 2nd Phase would be launched. It means that from 3rd year itself, student would start getting enrolled in PM Internship Scheme phase 2. Enrollment duration for phase 2 would be of 3 years and 70 lakh youths would be provided internship with an outlay of Rs. 44,000 crore.

In total, 1 crore youths would be provided internships in the next 5 years with an outlay of Rs. 63,000 crore.

Source / Reference link: https://www.indiabudget.gov.in/doc/budget_speech.pdf