Employment Linked Incentive Scheme – Recent Updates

The Ministry of Labour and Employment awaits approval from the Union Cabinet for the Employment Linked Incentive (ELI) scheme, which aims to enhance job creation and improve employability within the workforce.

Scheme Overview

The ELI scheme is part of the Prime Minister’s Package for Employment and Skilling and has a substantial budget exceeding ₹10,000 crore. The scheme intends to provide financial incentives to employees based on their registration with the Employees’ Provident Fund Organisation (EPFO).

Financial Details

Employees earning up to ₹1 lakh per month can receive up to one month’s wage, capped at ₹15,000, distributed in three instalments. The allocated budget for the scheme spans multiple financial years, with ₹22,333 crore earmarked for FY 2024-25 to FY 2027-28 for the first part alone.

Scheme Components

The ELI scheme consists of three distinct parts:

• Part A – Targets first-time employees, benefiting over 2.1 crore individuals.
• Part B – Concentrates on the manufacturing sector, covering approximately 30 lakh employees.
• Part C – Provides incentives to employers for hiring new workers, assisting around 50 lakh employees, including first-time job seekers and rejoiners.

Employers may receive up to ₹3,000 per month for two years for each additional employee hired. These funds are intended to support their EPFO contributions.

Implementation Status

The Ministry indicated that the estimated expenditure for FY 2024-25 might be lower than the initial ₹10,000 crore due to the limited time available for implementation. However, spending is anticipated to increase in subsequent financial years.

The EPFO has established a Programme Management Unit to oversee the scheme’s execution. Additionally, the Ministry is developing an IT system for registration, incentive disbursement, and related functions. A grievance redressal mechanism will also be available for beneficiaries.

GKToday Notes:

1. Employment Linked Incentive (ELI): The ELI scheme aims to boost job creation in India. It targets first-time employees and offers financial incentives based on EPFO enrollment.
2. Employees’ Provident Fund Organisation (EPFO): EPFO manages retirement savings for Indian workers. It ensures financial security through provident funds and pension schemes, impacting millions of employees across the country.
3. Part A of ELI Scheme: This part specifically benefits first-time employees. It is expected to assist over 2.1 crore individuals in securing employment opportunities and financial stability.
4. Grievance Redressal Mechanism: A mechanism will be established for beneficiaries. It aims to address complaints and ensure smooth implementation of the ELI scheme for all participants.

Month: Current Affairs - December, 2024

Category: Government Schemes Current Affairs