India’s ELI Scheme; Boosting Employment and Social Security
In a significant move towards promoting employment and ensuring social security for workers, the Ministry of Labour & Employment (MoLE), Government of India, recently convened an inter-ministerial consultation on the Employment Linked Incentive (ELI) Scheme.
This scheme, introduced in the Union Budget 2024-25, aims to encourage formalization of the workforce and create meaningful job opportunities across various sectors.
Key Participants in ELI Scheme Meeting
The meeting, chaired by Ms. Sumita Dawra, Secretary of the Ministry of Labour & Employment, brought together representatives from several ministries and departments.
Notable participants included the Ministry of Commerce & Industry, Ministry of Finance, Ministry of Micro, Small and Medium Enterprises (MSME), Ministry of Textiles, Ministry of Skill Development & Entrepreneurship.
Ministry of Rural Development, Ministry of Corporate Affairs, NITI Aayog, and others were also a part of the discussion.
ELI Scheme Overview
The ELI Scheme comprises three distinct components, each designed to address specific aspects of employment and labor force formalization:
Scheme A: First-Time Employees – Targeting first-time employees in the formal sector registered with the Employees’ Provident Fund Organisation (EPFO).
Offers a one-month wage (up to Rs. 15,000) in three installments. The scheme aims to recognize and incentivize new entrants to the workforce.
Scheme B: Job Creation in Manufacturing – This scheme focuses on job creation within the manufacturing sector. Incentivizes both employees and employers for additional employment of first-time employees.
Benefits are based on EPFO contributions during the first four years of employment. Eligible employees have salaries up to Rs. 1 lakh.
Scheme C: Employer Support – Provides support to employers by reimbursing up to Rs. 3,000 per month for two years. Reimbursement is toward their EPFO contribution for each additional employee with a salary of up to Rs. 1 lakh per month.
Secretary’s Call to Action
Secretary Sumita Dawra emphasized that the ELI scheme presents a golden opportunity for various sectors to formalize their workforce and ensure social security.
She urged participating ministries to collaborate with the Ministry of Labour & Employment in organizing advocacy initiatives.
These efforts would help explain the scheme comprehensively to both employers and employees, ultimately driving greater participation.
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