Cabinet Meeting Outcome: Rs 1 Lakh Crore Job Push to Create 3.5 Crore Jobs, Offer Rs 15,000 Bonus for First-Time Workers - Details

The Union Cabinet on Tuesday, July 1, 2025, approved the Employment Linked Incentive (ELI) Scheme to aid fresh employment oppurtunities, improve employability, and overall social secuirty across varying sectors, especially in the manufacturing vertical.

Key Provision Under Employment Linked Incentive Scheme

The first-time employees will get one month’s wage (up to Rs 15,000/-), and the employers will be given incentives for a period to two years for generating additional employment, with extended benefits for another two years for the manufacturing sector.  

The ELI Scheme was announced uring the centre's budget for fiscal year 2024-25 under the Prime Minister's five schemes focused on creating employment , skilling and other opportunities for 4.1 crore youth.

Dr. Anish Shah, Immediate Past President, FICCI,  said, "By incentivising first-time workers, boosting manufacturing, and encouraging employer participation, it reflects smart, inclusive policymaking. Its emphasis on dignity, security, and formalisation aligns deeply with industry aspirations. We commend the Government’s vision and commitment to creating meaningful jobs at scale.”

The overall budget outlay for these schemes stood at Rs 2 lakh crore.

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With an outlay of Rs 99,446 Crore, the ELI Scheme aims to incentivize the creation of more than 3.5 Crore jobs in the country, over a period of 2 years.  Out of these, 1.92 Crore beneficiaries will be first timers, entering the workforce.  

The benefits of the ELI scheme would be applicable to jobs created between August 1, 2025 and July 31, 2027.

What Incentives Will First Time Employees Receive?

Targeting first-time employees registered with EPFO, this Part will offer one-month EPF wage up to Rs 15,000 in two installments. The employees to be considered should have a salary up to Rs 1 lakh.

The first installment will be payable after six months of service and the second installment after 12 months of service and completion of a financial literacy programme by the employee.

Further, to build upon employee's saving mindset a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.

The Part A should benefit 1.92 crore first time employees.

How Will Employers Benefit From Centre's ELI Scheme?

This part will cover generation of additional employment in all sectors, with a special focus on the manufacturing sector.  The employers will get incentives in respect of employees with salaries up to Rs 1 lakh.  

The centre will incentivize employers, 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.

Establishments, which are registered with 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.

What Is The Incentive Payment Mechanism In Place?

All payments to first-time employers  will be under Part A of the Scheme will be made via DBT (Direct Benefit Transfer) mode using Aadhar Bridge Payment System (ABPS).  Meanwhile, the payment to employers under Part B will be made directly into their PAN-linked Accounts.

With ELI Scheme, the government intends to catalyse job creation in all sectors, particularly in manufacturing sector, besides incentivizing youth joining the workforce for the first time.  An important outcome of the scheme will also be formalization of the country’s workforce by extending social security coverage for crores of young men and women.