Centre approves Employment Linked Incentive scheme to boost job creation

NEW DELHI: The Union Cabinet has approved the Employment Linked Incentive (ELI) scheme, under which the Central Government will contribute to the Employees’ Provident Fund (EPF) for new employees for one year and for employers for two years. The scheme will apply to appointments made between August 1, 2025, and July 31, 2027, and is expected to benefit nearly 1.92 crore people.

Employers registered under EPFO with less than 50 employees must hire at least two new workers for a minimum of six months. Those with 50 or more employees must hire at least five new employees to avail of the benefit. There is no upper limit on the number of employees that can be hired under the scheme.

This scheme, announced in the first budget of the third Modi government, aims to generate over 3.5 crore jobs within two years. A total of Rs 99,446 crore has been allocated for the project.

For employees entering the workforce in the manufacturing sector for the first time, and earning up to Rs 1 lakh per month, the Central Government will contribute the EPF share (up to Rs 15,000).

The payment will be made in two phases:
The first instalment after 6 months
The second after 12 months

A part of this amount will be held as savings, which employees can withdraw later.

Benefit for employers
For new employees earning up to Rs 1 lakh per month, the government will pay the employer’s EPF contribution of up to Rs 3,000 per employee per month. This benefit will continue for two years for most sectors and up to four years in the construction sector.

EPF contribution based on salary slab
Monthly Salary Govt EPF Contribution
Up to Rs 10,000................Rs 1,000
Rs 10,000 – Rs 20,000..........Rs 2,000
Rs 20,000 – Rs 1,00,000........Rs 3,000