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Time of India
2 days ago
- Business
- Time of India
Ahead of state polls, cabinet approves Rs 1 lakh crore scheme aimed at creating 3.5 crore jobs
NEW DELHI: The Cabinet Tuesday approved the Rs 1-lakh crore Employment Linked Incentive (ELI) scheme, aimed at generating more than 3.5 crore jobs in the organised sector. Announced in July 2024, the scheme is meant to counter criticism over inadequate jobs being created in the economy at a time when there is a rising number of job seekers in the market. The decision comes ahead of assembly elections in Bihar, West Bengal, Assam, Kerala and Tamil Nadu. I&B minister Ashwini Vaishnaw said the scheme was finalised after detailed deliberation with industry leaders and other stakeholders. The scheme has two elements, one targeted at first-time employees who earn up to Rs 1 lakh a month and are members of the Employees Provident Fund Organisation. The Centre will pay up to Rs 15,000 each to around 1.9 crore employees. Govt hopes these jobs will be created by Aug 2027. ELI to aid newcomers in electronics, auto & semiconductor space The Rs 15,000 payment to first-time employees will be split into two instalments, with the second payment to be made after 12 months directly into their bank accounts. The second part is targeted at encouraging manufacturing companies to hire more. Govt will offer up to Rs 3,000 a month for two years for each additional employee who stays on for six months or more. For the manufacturing sector, the incentives will be extended to the third and fourth year as well. "Establishments which are registered with the EPFO will be required to hire at least two additional employees (for employers with less than 50 employees) or five additional employees (for employers with 50 or more employees) on a sustained basis for at least six months," an official statement said. The scheme may benefit several of the new entrants coming up with new facilities, especially in electronics, semiconductors and the automobiles space. "ELI is a significant step towards boosting employment and formalising India's workforce. ELI scheme opens doors for first-time job seekers, empowering them to contribute meaningfully to India's growth story. It empowers employers to expand their workforce and gives a decisive push to India's labour-intensive sectors," said CII director general Chandrajit Banerjee.
India Gazette
2 days ago
- Business
- India Gazette
ELI Scheme gets industry thumbs-up as game-changer for job creation
New Delhi [India], July 1 (ANI): Indian industry leaders have hailed the government's approval of the Employment Linked Incentive (ELI) Scheme as a bold and timely move to tackle India's pressing job creation challenge. The business executives and policy experts believe that the scheme will transform the employment landscape, as it focuses on formalising the workforce, empowering first-time job seekers, and reducing hiring costs for employers--especially in labour-intensive and capital-constrained sectors. Many have compared its potential impact to that of the Production Linked Incentive (PLI) scheme, calling it a 'game-changer' for youth employment, regional development, and growth of MSMEs. The Union Cabinet on Tuesday approved the much-anticipated Employment Linked Incentive (ELI) Scheme, aimed at generating over 3.5 crore jobs and providing a major boost to formal employment, particularly in labour-intensive sectors such as manufacturing, textiles, tourism, and construction. Welcoming the move, Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), said, 'ELI is a significant step towards boosting employment and formalising India's workforce. The ELI scheme opens doors for first-time job seekers, empowering them to contribute meaningfully to India's growth story. It empowers employers to expand their workforce and gives a decisive push to India's labour-intensive sectors.' With an outlay of Rs 99446 crore, the ELI Scheme will support the creation of over 3.5 crore jobs. Sumita Dawra, former Secretary, Ministry of Labour & Employment, said that the scheme has been prepared with a lot of consultation with industry, trade unions, more than 25 ministries of the government of India, with all the state governments, and with the regional workshops, which were done in the states to consult the industry there and the officers. 'PM was very clear that the scheme should be simple and effective so that the real benefit of the scheme reaches the youth of the country, particularly the first-timers who are entering the workforce, and also it serves as an incentive for employment generation, particularly in the manufacturing sector... More than 3.5 crore jobs are expected as a result of the scheme,' she said. Subhrakant Panda, Managing Director of IMFA, said, 'The scheme will drive employment, especially in the manufacturing sector, by taking an innovative approach that provides support to those entering the workforce for the first time with incentives for sustained employment. This will be a game changer for the labour-intensive industries and MSMEs.' Dr Ranjeet Mehta, CEO and Secretary General of PHD Chamber of Commerce and Industry (PHDCCI), said the scheme comes at a time when India's youth population is at its peak. 'This announcement by the government is very important, as India has the world's largest youth population. We have a demographic dividend and having this kind of scheme will definitely create employment for our youth population. Secondly, it also incentivises industries, especially the MSMEs who are always very short on capital.' 'So giving this kind of a scheme and reimbursing the cost for one year will definitely reduce the cost of the employment at the same time, this will also focus on regional development,' he added. For businesses, the scheme also offers direct wage and hiring-related incentives. Raghunandan Saraf, Founder and CEO of Saraf Furniture, noted the dual benefits for employers and employees. 'The scheme is actually intended to give more opportunities to the employees who are struggling to find jobs or find employment. So this is going to be a good boost to the current employment market as well... It also helps the employees in retaining the employees. This is going to lower the attrition rate as well; it's also going to increase savings for the employees,' he added. Saraf further added, 'Employers are also set to receive some incentive based on this, a nominal amount. So that incentive is just to make sure that employers are also on board with the scheme... One larger benefit is that the attrition rate will be lower now. since the incentive is to be distributed after six months and then after 12 months. So that means the attrition rate will be lower and at the same time, employers will also receive some incentive.' Under the Scheme, while the first-time employees will get one month's wage up to Rs 15,000, the employers will be given incentives for a period of two years for generating additional employment. The ELI Scheme was announced in the Union Budget 2024-25 as part of the PM's package of five schemes to facilitate employment, skilling and other opportunities for 4.1 Crore youth with a total budget outlay of Rs 2 Lakh Crore. (ANI)
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Business Standard
2 days ago
- Business
- Business Standard
Cabinet approves ₹1 trillion employment-linked incentive scheme
In a bid to support employment generation, enhance employability and social security, the Union Cabinet on Tuesday approved the Employment Linked Incentive (ELI) scheme, which was announced in the Union Budget last year as part of the Prime Minister's package to facilitate skilling and job creation in the country. The ELI scheme aims to support employment generation of more than 35 million jobs in two years with an outlay of Rs 1 trillion. The benefits of the scheme would be applicable to jobs created between 1 August 2025 and 31 July 2027. 'The Union Cabinet has approved the ELI scheme to boost job creation, improve employability, and enhance social security across all sectors. With an outlay of around Rs 1 trillion, the scheme aims to generate over 35 million employment opportunities for our Yuva Shakti,' Labour Minister Mansukh Mandaviya posted on X. The scheme consists of two parts, with Part A focused on first-timers and Part B focused on employers. Under Part A, one month's EPF wage up to Rs 15,000 in two instalments will be given to first-time employees registered with the Employees' Provident Fund Organisation (EPFO). Employees with salaries up to Rs 1 lakh will be eligible. The first instalment will be payable after six months of service, and the second instalment will be payable after 12 months of service and completion of a financial literacy programme by the employee. 'To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument or deposit account for a fixed period and can be withdrawn by the employee at a later date. This will benefit around 19.2 million fresh beneficiaries entering the workforce,' said the Labour Ministry in a statement. Part B will cover generation of additional employment with salaries up to Rs 1 lakh in all sectors, with a special focus on the manufacturing sector. The government will incentivise employers registered with EPFO, up to Rs 3,000 per month, for two years, for each additional employee with sustained employment for at least six months. For the manufacturing sector, incentives will be extended to the third and fourth years as well. Employers with fewer than 50 employees will have to add at least two additional employees, or five additional employees in the case of establishments with 50 or more employees, to avail of benefits. 'In the Budget, three ELI schemes were announced. However, the second and third schemes had quite a lot of overlap; hence they have been condensed as Part B. All other parameters remain the same,' explained an official, requesting anonymity. Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), said the ELI scheme opens doors for first-time job seekers, empowering them to contribute meaningfully to India's growth story. 'It also enables employers to expand their workforce and gives a decisive push to India's labour-intensive sectors,' he said. Puneet Gupta, Tax Partner, EY India, said the initiative marks a significant milestone in the journey towards a more robust and inclusive workforce. 'The government is committed to fostering job creation, enhancing employability, and strengthening social security across all sectors. For example, an employer in the non-manufacturing sector hiring 100 additional employees could receive up to Rs 72 lakh over two years, while a manufacturing sector employer could benefit from an impressive Rs 1.44 crore over four years,' he said. The Prime Minister Internship Scheme — another component of the package announced last year — had its first pilot run between October and December 2024. With more than 600,000 applications received, 127,000 internship opportunities were posted by 280 top companies covering 745 districts, of which over 82,000 internship offers were made to candidates. In Round II of the internship scheme, nearly 118,000 internships have been offered so far, with participation from 327 reputed companies. Meanwhile, in May, the Union Cabinet also approved the Rs 60,000 crore Industrial Training Institute (ITI) upgradation scheme, with a focus on 1,000 government ITIs in a hub-and-spoke arrangement with industry-aligned revamped trades. Out of the Rs 60,000 crore to be spent under the scheme, the Centre would contribute Rs 30,000 crore, states Rs 20,000 crore, and industry Rs 10,000 crore.
