Provident Fund (PF) – New Employment Linked Incentive (ELI) Scheme: A Big Boost for Job Creation & Formal Employment


In a major push towards boosting employment and securing the future of India’s youth, the Union Cabinet has approved the Employment Linked Incentive (ELI) Scheme. With a total outlay of ₹99,446 Crore, the ELI Scheme is designed to generate over 3.5 Crore jobs over the next two years. This initiative is part of a broader ₹2 Lakh Crore package announced in Budget 2024–25, aiming to empower 4.1 Crore youth through employment, skill development, and economic opportunity.

Key Highlights of the ELI Scheme

🧑‍💼 Part A: Incentive to First-Time Employees

Designed to support 1.92 Crore first-time employees, Part A focuses on youth entering the workforce for the first time and encourages long-term savings and financial discipline.

  • 🎯 Eligibility: First-time EPFO-registered employees with a monthly salary up to ₹1,00,000 & Must be hired between 1st August 2025 and 31st July 2027

  • 💰 Incentive: One-month EPF wage up to ₹15,000 paid in two instalments:

    • 1st Instalment: After 6 months of continuous service.

    • 2nd Instalment: After 12 months, plus completion of a Financial Literacy Programme. 

  • 💡 A portion of the incentive will be deposited in a savings instrument to promote future savings.

🏭 Part B: Incentive to Employers

This part of the scheme is aimed at incentivizing employers to create sustainable job opportunities, especially in the manufacturing sector.

🔹 Eligibility Criteria for Employers:

  • Must be registered with EPFO.

  • Must hire:

    • Minimum 2 additional employees (if staff < 50).

    • Minimum 5 additional employees (if staff ≥ 50).

  • New hires must remain in employment for at least 6 months.

📊 Incentive Structure:


🔄 For the manufacturing sector, this incentive will continue up to 4 years.

🧾 Real-Life Examples

To help you understand how this scheme will apply practically, here are two example cases:

👤 Employee 1

  • Salary: ₹12,000

  • Part A (Employee Incentive): Eligible for up to ₹12,000 in two instalments.

  • Part B (Employer Incentive): Employer will receive ₹2,000/month for this employee.

👤 Employee 2

  • Salary: ₹60,000

  • Part A (Employee Incentive): Eligible for ₹15,000 in two instalments.

  • Part B (Employer Incentive): Employer will receive ₹3,000/month for this employee.


💵 How Will Payments Be Made?

  • First-Time Employees: Through Direct Benefit Transfer (DBT) via Aadhaar Bridge Payment System (ABPS).

  • Employers: Directly into PAN-linked bank accounts.

✅ Benefits at a Glance

🏢 What It Means for Corporate and Manufacturing Employers

  • 🔧 Manufacturing Sector: Eligible for incentives up to 4 years, making it a long-term opportunity to scale up operations and manpower.

  • 🏭 Corporate Employers: By hiring fresh talent and maintaining a minimum threshold of new employees, you receive monthly reimbursements up to ₹3,000 per employee up to 2 years.

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