Notification Details

Employment Linked Incentive (ELI) Scheme – A Game Changer for Job Creation in India

The Government of India has introduced the Employment Linked Incentive (ELI) Scheme, also known as PM Viksit Bharat Rozgar Yojana (PM-VBRY), to accelerate job creation and strengthen formal employment through the Employees' Provident Fund Organisation.

Effective from 01 August 2025, the scheme aims to promote sustained employment generation while expanding social security coverage under EPF.

What is the Objective of the Scheme?

The ELI Scheme focuses on:

Encouraging net additional employment
Supporting first-time employees
Promoting workforce formalization
Strengthening the manufacturing sector
Ensuring transparent incentive disbursement through DBT

This is a structured reform aligned with India’s long-term employment growth vision.

Part A – Incentive for First-Time Employees

Under Part A, eligible first-time employees will receive financial support as they enter the formal workforce.

Who is a First Timer?

An employee:

Joining between 01.08.2025 and 31.07.2027
Who was not previously a contributing EPF member
Whose contribution is received for the first time in EPFO

Incentive Benefit:

Equal to one month EPF wage
Maximum up to ₹15,000
Paid in two installments
Through Direct Benefit Transfer (DBT) to Aadhaar-seeded bank account

Conditions:

Complete 6 months of continuous service (First installment)
Complete 12 months + Financial Literacy Course (Second installment)
Aadhaar-authenticated UAN mandatory

Part B – Incentive for Employers

Part B incentivizes establishments that create net additional employment over their baseline strength.

Threshold Criteria:

Establishments with baseline < 50 employees → Add minimum 2 employees
Establishments with baseline ≥ 50 employees → Add minimum 5 employees

Incentive for Employers:

Up to ₹3,000 per month per employee
For 2 years (all sectors)
For 4 years (manufacturing sector)

Manufacturing classification is aligned with the Central Goods and Services Tax Act definition.

Only employees with EPF contributions through ECR are counted
Employees must be retained for at least 6 months
Incentives stop if employment falls below baseline
PAN-linked bank account details must be updated
Timely ECR filing is critical

Why This Scheme Matters

The ELI Scheme is more than a financial incentive. It is a structural policy tool to:

Boost formal employment
Encourage sustainable hiring
Improve compliance culture
Support MSMEs and manufacturing units
Expand India’s social security ecosystem

For HR professionals, payroll managers, and compliance consultants, understanding baseline calculation, threshold criteria, and ECR filing mechanics is essential to fully leverage the scheme benefits.

Final Thoughts

The Employment Linked Incentive Scheme marks a significant step toward building a stronger, formal, and secure workforce in India. Establishments that plan strategically and maintain compliance discipline can unlock substantial long-term benefits.