Employment Linked Incentive(ELI) Scheme

Latest Update: 

As per the latest cabinet update in July 2025, EPFO registration and Aadhaar seeding must be completed by 30 June 2025. This scheme will covers jobs created between August 1, 2025, and July 31, 2027.

The Employment Linked Incentive (ELI) Scheme is a new government initiative aimed at boosting formal job creation. Announced in Budget 2024–25, it offers financial incentives to employers and first-time employees registered with EPFO.

This article will guide you the features, eligibility, and how you can apply for the Employment Linked Incentive Scheme. 

What is Employment Linked Incentive Scheme?

The Employment Linked Incentive (ELI) Scheme is a government initiative announced in Budget 2024–25. This scheme benefits employers and first-time employees who have enrolled in the EPFO (Employees Provident Fund Organisation), aiming to incentivise job creation and reduce informal work.    

To receive these benefits, employees must enrol with the Employees’ Provident Fund Organisation (EPFO), activate their Universal Account Number (UAN), and link Aadhaar with their bank accounts. As of the latest cabinet update (July 2025), the EPFO deadline for completing these steps is 30 June 2025, and the benefit window will apply to jobs created between 1 August 2025 and 31 July 2027.

Three Schemes Under ELI

The 3 Employment Linked Incentive (ELI) Schemes are as follows:

• Scheme A - First-time employment 
• Scheme B - Job creation in manufacturing 
• Scheme C - Support to employers 

These 3 schemes will focus on recognising first-time employees and providing support to employees and employers. 

ELI Scheme Launch Date and Deadline

• Scheme Announced: Budget 2024–25
• Enrolment Period: 2 years
• Deadline for EPFO enrolment and Aadhaar seeding: 30 June 2025

ELI Scheme Eligibility Criteria

To avail benefits under the ELI Scheme:

• Employees must earn less than ₹1 lakh per month
• Employees must be enrolled with EPFO
• Aadhaar must be seeded with the bank account and UAN
• Employers should create net new employment above the previous year’s EPFO baseline
• For manufacturing-specific incentives, the employer must hire at least 50 non-EPFO workers or 25% of the baseline, whichever is lower.

ELI Scheme Benefits through EPFO

Scheme A: First-time Employment Scheme

This scheme is all about boosting employees entering the formal workforce for the first time.

• Benefit: Direct transfer of up to ₹15,000 in 2 instalments
  • 1st Instalment: After 6 months of continuous EPFO-enrolled employment
  • 2nd Instalment: After 12 months + successful completion of a mandatory Financial Literacy Course
• Salary Cap: Up to ₹1 lakh/month
• Duration: Valid for 2 years from EPFO enrolment
• Condition: If the employee exits before 12 months, the employer must refund the subsidy

This scheme is expected to benefit nearly 210 lakh youth in India.

Scheme B: Job Creation in Manufacturing

Targeted at the manufacturing sector, this scheme rewards employers and first-time employees in a structured way.

• Eligibility:
  • Employer with 3-year track record in EPFO
  • Must hire ≥50 non-EPFO workers or 25% of the baseline, whichever is lower
  • Applies only to in-sourced employees
  • Salary must not exceed ₹1 lakh/month (capped at ₹25,000/month for subsidy calculation)
• Incentive Distribution (split between employee and employer):

• Duration: Benefit runs for 4 years (if employee retained)
• Condition: Employer refunds subsidy if employee exits before 12 months

This scheme is expected to support job creation for 30 lakh workers in the manufacturing space.

Scheme C: Support to Employers Scheme

This is for employers in all sectors looking to grow their workforce.

• Eligibility Criteria:
  • If employer has <50 employees: Must hire at least 2 net new
  • If employer has ≥50 employees: Must hire at least 5 net new
  • Salary cap: ₹1 lakh/month
  • Employees don’t have to be new to EPFO
• Subsidy (EPFO Reimbursement) Slabs:

• Duration: 2 years
• If employer creates over 1,000 jobs, subsidy continues in Year 3 and 4 at reduced rates, similar to Scheme B
• Not applicable to employees already covered under Scheme B

This scheme is expected to incentivise additional employment of around 50 lakh persons.  

Coverage and Estimated Outlay of ELI Scheme

The table below provides the details of the 3 Employment Linked Incentive Schemes:

How to Apply for ELI Scheme Online

The government has not launched a separate portal for the ELI scheme application yet. However, here’s how employers and employees can ensure eligibility:

For Employees:

• Activate UAN at the EPFO Member Portal
• Link Aadhaar with UAN and bank account
• Enrol in EPFO through employer
• Complete mandatory Financial Literacy course (for second instalment under Scheme A)

For Employers:

• Maintain a valid EPFO registration with 3-year track record (for Scheme B)
• Hire new employees per the eligibility criteria
• Retain employees for at least 12 months to avoid refunding benefits

Under the 3 newly announced employment linked incentive schemes in Budget 2024, the government will provide subsidies and incentives to employees and employers. This will boost the hiring process by employers and also provide benefits to employees, thus increasing employment opportunities for the youth.

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