NEW DELHI: In a bid to boost employment generation, especially in the manufacturing sector, the Union Cabinet on Tuesday approved the Employment Linked Incentive (ELI) Scheme with an outlay of Rs 99,446 crore. The scheme is expected to create 3.5 crore jobs across the country over a two-year period, Minister of Information and Broadcasting Ashwini Vaishnaw said while announcing the scheme. Of these, 1.92 crore beneficiaries are expected to be first-time entrants into the workforce, the minister said.

The benefits of the scheme will apply to jobs created between August 1, 2025 and July 31, 2027. The scheme comprises two components—Part A, which targets first-time employees, and Part B, which incentivises employers to create additional jobs.

Under Part A, first-time employees registered with the Employees’ Provident Fund Organisation (EPFO) will receive support equivalent to one month’s EPF wage (up to Rs 15,000), paid in two instalments. The first instalment will be provided after six months of continuous employment, and the second after 12 months of service.

Under Part B, the scheme focuses on encouraging employers to create additional jobs across all sectors, with emphasis on manufacturing. Employers will receive incentives of up to Rs 3,000 per month per new employee for two years, provided the employee remains in sustained employment for at least six months. For the manufacturing sector, the incentives will be extended to the third and fourth years as well.

How to qualify

Firms with fewer than 50 workers must hire two more workers. Larger firms must add 5 new staff and keep them for six months.