The Indian government has approved the RS 99,446 crore Employment-Linked Incentive (ELI) scheme, aimed at generating over 2 crore formal jobs by offering direct financial support to new employees and hiring incentives to employers. The scheme, launching on August 1, 2025, is expected to transform India’s formal job market.As part of the initiative, newly employed individuals earning up to Rs 1 lakh per month and registered with the Employees’ Provident Fund Organisation (EPFO) will be eligible for a one-time incentive equal to a month’s wage, capped at Rs 15,000. This amount will be paid in two instalments over a six-month period through direct benefit transfer, reported ET.A portion of the incentive will be held back for a fixed duration to encourage savings. The government estimates that this measure could lead to the creation of around 1.92 crore new formal jobs.
ELI scheme for employers: Eligibility and payout details
Employers will also receive financial support for creating new jobs. For each additional employee retained for at least six months, the employer will get up to Rs 3,000 per month for two years. In the manufacturing sector, the incentive will extend into the third and fourth years as well. However, the registration window for this benefit will remain open only from August 1, 2025, to July 31, 2027.To qualify, establishments with up to 50 employees must hire at least two new workers, while those with 50 or more employees must hire five. The amount of reimbursement per employee will depend on their salary: Rs 1,000 for wages up to Rs 10,000; Rs 2,000 for wages between Rs 10,000 and Rs 20,000; and Rs 3,000 for wages above Rs 20,000 and up to Rs 1 lakh. These payments will be transferred directly into PAN-linked employer accounts.According to EY India, a non-manufacturing employer hiring 100 additional employees could receive up to Rs 72 lakh over two years, while a manufacturing firm could earn as much as Rs 1.44 crore over four years. The ELI scheme is projected to encourage the creation of around 2.6 crore jobs through these employer incentives, reinforcing the government’s broader agenda to formalise the workforce and strengthen job growth.
