“A Game-Changer for India’s Job Market”
Why the ELI Scheme 2025 Could Be the Booster Dose Our Economy and Industry Needs
By Satendra Singh, Chairman, Indian Council of Industrial Management (ICIM)
India is at a critical inflection point in its economic journey. As the nation eyes its ambition of becoming a $5 trillion economy, it is imperative that we focus not just on GDP numbers, but on building a future-ready workforce and empowering industries to thrive. The recently launched Employment-Linked Incentive (ELI) Scheme – 2025 is a bold and timely policy decision that addresses both these needs with precision and foresight.
With a budgetary allocation of ₹99,446 crore and an ambitious goal of creating 3.5 crore formal jobs over two years, the ELI scheme reflects India’s commitment to driving inclusive growth. It is not just another employment scheme—it’s a strategic intervention aimed at reshaping how industries hire, retain, and empower talent.
Targeting the First-Time Workforce
One of the most commendable features of the ELI Scheme is its focus on first-time job seekers. Part A of the scheme offers direct financial incentives to employees earning up to ₹1 lakh per month who are registering with the EPFO for the first time. This is an enormous opportunity for over 1.92 crore young Indians who are set to enter the workforce.
The built-in requirement of financial literacy training before the release of the second installment is especially progressive. It goes beyond providing a financial cushion—it encourages responsible money management and paves the way for long-term stability for new earners.
Empowering Employers to Grow and Hire
Simultaneously, Part B of the scheme provides employers with ₹3,000 per month per new hire, for a period of two years—extendable to four years in the manufacturing sector. This dual benefit structure is particularly effective in incentivizing both job creation and employee retention. For businesses operating on tight margins or recovering from post-pandemic setbacks, this can be a much-needed nudge to expand their workforce without compromising on sustainability.
The requirement of minimum new hires—scaled to company size—ensures that even MSMEs can participate and benefit. In my view, this structure balances accountability with scalability.
A Nation-Wide Commitment, with Manufacturing at the Core
Approved on July 1 and set to roll out from August 1, the scheme spans across sectors but wisely gives extended validity to manufacturing—until July 2029. This reflects the government’s recognition of the sector’s central role in economic resurgence and employment generation. It also aligns with Make in India and Aatmanirbhar Bharat goals, by boosting domestic industrial capacity.
Policy Synergy Done Right
Another strategic advantage of the ELI Scheme is its push for policy convergence. By encouraging synergy with state employment programs and including Global Capability Centers (GCCs) and large employers in the fold, the scheme ensures that no stakeholder is left behind. This integrated approach can help standardize workforce quality, boost job formalization, and attract global investments.
Addressing the Gaps
While this is a historic step, it is important that we don’t lose sight of the informal sector. A significant portion of India’s workforce still operates outside formal structures, lacking social security and stability. Future iterations of the ELI Scheme should explore ways to bring these workers—and their employers—under its umbrella. Simplifying compliance and offering transitional incentives could make this possible without overwhelming small businesses.
A Defining Moment in India’s Economic Story
At the Indian Council of Industrial Management (ICIM), we see the ELI Scheme as a foundational policy that will ripple across decades. By addressing job creation, industry support, and financial literacy in a single stroke, the government has shown what meaningful, high-impact policymaking looks like.
We have pledged our full support in training industries, spreading awareness, and enabling employers to make the most of this opportunity. Because with the right tools, India’s workforce is not just capable of contributing to GDP growth—they are ready to lead it.
The ELI Scheme isn’t just an economic stimulus. It’s a social contract. It’s a declaration that every job matters, every worker matters, and that the future of this country will be built on the shoulders of a secure, skilled, and proud workforce.
