Employment-Linked Incentive Scheme

Commonly, known as ELI introduced by the government of India in the union budget 2024-25.

It aims at encouraging the companies to hire additional employees by providing financial aids or incentives.

In the ambit of this scheme following part will be considered:-

• All additional employment within a salary of Rs 1 lakh per month will be counted.
• The government will reimburse employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee.
• The scheme is expected to incentivize additional employment of 50 lakh persons.
• Additionally, this scheme benefits both the employers and employees by providing incentive benefits to both of them.

Outlay of the Scheme:-

As per the announcement made by Mrs. Nirmala Sitharaman, the Finance Minister while announcing the union budget 2024-25 on July 23, a central outlay of Rs. 2 lakh crore was allocated as a part of the prime minister’s package for five key schemes and initiatives that the government will initiate over the next five years.

• The first scheme will target first-time employees in the formal sector who are registered in EPFO. This scheme offers a one-month wage (up to Rs. 15,000) in three instalments.
• The second scheme will focus on job creation in the manufacturing sector, this scheme will incentivize both employees and employers for additional first-time employees.

The scheme will offer benefits based on their EPFO contributions during the first four years of employment. Employees with salaries up to Rs. 1 Lakh will be eligible under this scheme.

• The third scheme under the PMs Package will provide support to employers by reimbursing Rs. 3,000 per month for two years towards their EPFO contribution for each additional employee with a salary of up to Rs. 1 lakh per month.

Companies raise concerns over subsidy refund in proposed ELI scheme

Representatives of companies have raised concerns over the inclusion of a contentious clause in the proposed employment-linked incentive (ELI) scheme. Under two key programmes, employers are required to refund the government-provided subsidy if an employee’s job ends within 12 months of recruitment.