The Employment Linked Incentive (ELI) scheme — officially called the Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY) — is a ₹99,446 crore Government of India initiative that pays first-time employees up to ₹15,000 and reimburses employers up to ₹3,000 per month per new hire to create 3.5 crore formal jobs between August 1, 2025 and July 31, 2027. Approved by the Union Cabinet on July 1, 2025, it is the single largest employment push in India's history, covering all sectors with extended benefits for manufacturing. If you run a business in India or are entering the formal workforce for the first time, the scheme directly puts money in your pocket — but only if you understand the eligibility rules and claim through the right channels.
Last verified: 2026-07-30 · Primary keyword: India employment linked incentive scheme
- ₹99,446 crore outlay (part of a wider ₹2 lakh crore PM package for 4.1 crore youth)
- 3.5 crore job target across all sectors, August 2025–July 2027
- Part A: up to ₹15,000 for first-time employees (1.92 crore beneficiaries)
- Part B: up to ₹3,000/month per hire for employers (2.6 crore jobs)
- Manufacturing gets 4 years of incentives (vs 2 for other sectors) Outlay figures are government-stated and may be revised during implementation.
What is India's Employment Linked Incentive (ELI) scheme?
The ELI scheme is a central government employment subsidy programme implemented by the Ministry of Labour and Employment through the Employees' Provident Fund Organisation (EPFO). It was first announced in the Union Budget 2024-25 as part of the Prime Minister's package of five schemes — a wider ₹2 lakh crore outlay targeting 4.1 crore youth over five years — and received Cabinet approval on July 1, 2025 with a specific allocation of ₹99,446 crore. The scheme operates in two parts: Part A pays cash directly to first-time formal employees, and Part B reimburses employers for creating net new jobs. All payments are routed through EPFO-linked accounts using Aadhaar Bridge Payment System (for employees) and PAN-linked bank accounts (for employers).
The scheme's official name — Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY) — reflects its alignment with the government's Viksit Bharat @2047 vision. It targets formalisation of India's workforce: converting informal employment into EPFO-registered jobs with social security coverage.
Who is eligible for ELI scheme benefits?
Eligibility splits along two tracks: one for employees and one for employers. Both require EPFO registration as the foundational prerequisite.
Part A — First-time employees:
- Must be registering with EPFO for the first time on or after August 1, 2025
- Monthly salary must not exceed ₹1 lakh
- Must have an active Universal Account Number (UAN)
- Aadhaar must be linked to both UAN and a bank account
- Must complete a mandatory financial literacy programme for the second installment
Part B — Employers:
- Must be registered with EPFO
- Must create net additional employment (headcount must grow above a baseline)
- Businesses with fewer than 50 employees must hire at least 2 additional workers
- Businesses with 50 or more employees must hire at least 5 additional workers
- New hires must be retained for a minimum of 6 months
- Employee salaries must be up to ₹1 lakh per month
Manufacturing establishments receive employer incentives for 4 years (2 years standard plus 2 years extended), while all other sectors receive incentives for 2 years.
How much money does the ELI scheme actually pay?
The financial benefits differ significantly between the two parts. Here is the complete incentive structure from the official Cabinet approval:
Part A — Employee incentive (paid to the worker):
| Benefit | Amount | Timing |
|---|---|---|
| First installment | Up to ₹15,000 (one month's EPF wage) | After 6 months of continuous service |
| Second installment | Remainder of the ₹15,000 cap | After 12 months + financial literacy course completion |
A portion of the incentive is held in a savings instrument for a fixed period to encourage savings before withdrawal.
Part B — Employer incentive (paid per additional employee per month):
| EPF Wage Slab of Additional Employee | Monthly Incentive to Employer |
|---|---|
| Up to ₹10,000 | Up to ₹1,000 (proportional) |
| ₹10,001 to ₹20,000 | ₹2,000 |
| ₹20,001 to ₹1,00,000 | ₹3,000 |
Employers receive these payments for 2 years (all sectors) or 4 years (manufacturing only). The estimated total benefit for 1,000 hires is approximately ₹7.2 crore in non-manufacturing and ₹14.4 crore in manufacturing, per analysis from EY India.
How does the ELI scheme compare to India's broader employment landscape?
The ELI scheme does not operate in isolation. It sits atop a layered employment policy stack, and understanding where it fits helps assess whether ₹1 lakh crore is ambitious or merely catching up.
| Initiative | Outlay | Job/Youth Target | Period | Implementing Agency |
|---|---|---|---|---|
| ELI Scheme (PMVBRY) | ₹99,446 crore | 3.5 crore jobs | Aug 2025–Jul 2027 | EPFO |
| PM Package (5 schemes total) | ₹2 lakh crore | 4.1 crore youth | 5 years (from FY 2024-25) | Multiple ministries |
| MSME sector (Udyam portal) | N/A (registration-based) | 8.04 crore jobs reported | FY 2025-26 | Ministry of MSME |
The MSME data is especially relevant. As of FY 2025-26, the Udyam Registration Portal reported over 8.04 crore jobs — up from 6.91 crore in FY 2024-25 and 5.45 crore in FY 2023-24, according to data shared by the Minister of State for MSMEs in Parliament. Uttar Pradesh leads with 1.18 crore MSME jobs, followed by Maharashtra (67.97 lakh) and Tamil Nadu (61.47 lakh). This suggests that formal employment is already growing organically at the MSME level, which raises the critical question of additionality (discussed below).
India's semiconductor push also intersects with employment strategy — the ₹76,000 crore semiconductor incentive scheme is creating a parallel pipeline of skilled manufacturing jobs that could feed into ELI-eligible employment, as covered in our analysis of India's semiconductor revolution.
What does "net additional employment" mean for employers?
This is the most misunderstood part of the scheme. The ELI does not reward you for hiring someone to replace a worker who left — it rewards genuine headcount growth.
The baseline is established from your EPFO headcount during the period August 1, 2024 to July 31, 2025. Any new EPFO enrolment above that baseline during the scheme period (August 1, 2025 onward) counts as net additional employment, provided the worker stays for at least 6 months.
For small businesses, this threshold is lower (2 net new hires if you have fewer than 50 employees). For larger establishments, you need 5 net new hires minimum. This makes the scheme particularly accessible to startups and SMEs that are already in growth mode — the kind of business that simplifying your operations can help scale efficiently.
If an employee leaves before the 6-month mark, that hire does not qualify for the employer incentive. If an employee leaves before 12 months (for Part A), the second installment to the employee is forfeited and the employer may need to return the subsidy.
How to apply for the ELI scheme (step by step)
The application process is built entirely around EPFO infrastructure. There is no separate application form for employees — benefits are processed automatically based on EPFO records.
For first-time employees (Part A):
- Get hired by an EPFO-registered employer. Once enrolled, your employer creates your EPFO account and activates your UAN.
- Activate your UAN on the EPFO Member Portal or via the UMANG mobile app.
- Link Aadhaar to your UAN and bank account. Both must be linked for DBT payments through the Aadhaar Bridge Payment System.
- Complete 6 months of continuous service. The first installment (up to ₹15,000, equivalent to one month's EPF wage) is paid after this milestone.
- Complete 12 months of service + financial literacy programme. The second installment is released only after both conditions are met.
For employers (Part B):
- Ensure your EPFO registration is current. You must be an active EPFO-registered establishment.
- Hire net additional employees above your baseline headcount. Track your August 2024–July 2025 baseline against new hires from August 2025 onward.
- Register on the PMVBRY portal (pmvbry.epfindia.gov.in) using your EPFO employer credentials. Provide PAN, GSTN, and PAN-linked bank account details.
- Sustain the new hires for at least 6 months. Incentive payments are calculated and disbursed periodically — disbursement cycles operate every six months per EY analysis.
- Manufacturing employers: claim extended benefits. If you are in manufacturing, file for the 3rd and 4th year incentives separately after the initial 2-year period.
Does the ELI scheme actually create new jobs, or just subsidise hiring that would happen anyway?
This is the fundamental question economists are asking — and the honest answer is: it depends on the sector and the business.
The government frames the scheme as a catalyst for formalisation: moving workers from informal employment (no PF, no social security) into the EPFO-registered formal sector. The 3.5 crore target is split into 1.92 crore first-time entrants (genuinely new to the formal workforce) and 2.6 crore employer-incentivised hires (which may include some replacement hiring that qualifies as "net additional" under the rules).
Critics argue that employer subsidies for hiring can create deadweight loss — paying businesses to do what they would have done regardless. The counterargument is that the 6-month retention requirement and net-headcount-growth rule filter out pure churn, and that the manufacturing extension to 4 years specifically targets sectors with longer ramp-up periods where job creation genuinely needs a nudge.
The data from the MSME sector supports both readings: the 8+ crore jobs reported under Udyam shows robust organic growth in formal employment, but the year-over-year increase (from 6.91 crore to 8.04 crore) coincides with the government's broader formalisation push. Whether ELI accelerates this trend or merely captures it in a new accounting bucket will be measurable by 2028.
For entrepreneurs evaluating whether to participate, the practical test is simple: if you were already planning to hire, the scheme is free money. If you were on the fence, the ₹2,000–₹3,000 per month per employee may tip the decision — especially for AI-agency and service businesses where wage bands fall squarely in the ₹10,000–₹20,000 range.
What this means for you
If you are a job seeker entering the formal workforce for the first time: make sure your employer registers you with EPFO. Activate your UAN, link Aadhaar, and commit to staying 12 months to receive the full ₹15,000. The financial literacy course is mandatory for the second installment — do not skip it.
If you are a business owner in India: audit your headcount against the August 2024–July 2025 baseline. Every net new hire since August 1, 2025 earning up to ₹1 lakh qualifies. Register on the PMVBRY portal. If you are in manufacturing, you have a 4-year window instead of 2 — plan hiring accordingly. The ₹3,000/month per employee can offset a meaningful portion of EPF contribution costs.
If you are an investor or analyst tracking India's employment story: the ELI outlay is real money (₹99,446 crore is roughly $11.7 billion), and the 3.5 crore target is measurable against EPFO payroll data. Track the EPFO's monthly payroll reports for new enrolment numbers — they are the most reliable leading indicator of whether the scheme is working.
How India's ELI scheme connects to the AI and technology economy
India's employment transformation is not happening in a vacuum — it runs parallel to the country's push into AI, semiconductors, and digital infrastructure. The jobs being created under ELI are increasingly in technology-adjacent sectors: manufacturing for electronics and semiconductors, services for digital platforms, and trading for e-commerce supply chains.
The tension is real, though. As India builds its physical AI data collection economy, the question of whether workers are training the AI systems that will eventually replace their own jobs becomes acute. The ELI scheme's focus on formalisation — ensuring these workers get social security, PF, and contract protections — is at least a partial counterweight. But the 2-year scheme window (4 for manufacturing) is shorter than the technology adoption curve, and there is no explicit provision for reskilling workers displaced by automation during or after the scheme period.
The most forward-looking businesses will use ELI incentives to hire and train workers in roles that are AI-complementary rather than AI-substitutable: human-in-the-loop oversight, physical tasks that robotics cannot yet handle, and creative/judgment-heavy roles. The ₹3,000/month employer incentive is modest, but it can be the difference between hiring a human auditor for an AI pipeline and attempting full automation.
FAQ
Q: What is the ELI scheme in India? A: The Employment Linked Incentive (ELI) scheme, officially called Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY), is a ₹99,446 crore government programme that pays first-time employees up to ₹15,000 and reimburses employers up to ₹3,000 per month per new hire to create 3.5 crore formal, EPFO-registered jobs between August 1, 2025 and July 31, 2027.
Q: Who is eligible for the ELI employee benefit? A: First-time employees registering with EPFO on or after August 1, 2025, with a monthly salary up to ₹1 lakh, an active UAN, and Aadhaar linked to both UAN and bank account are eligible. The full ₹15,000 requires completing 12 months of service plus a financial literacy programme.
Q: How much does the ELI scheme pay employers per employee? A: Employers receive ₹1,000/month for employees with EPF wages up to ₹10,000, ₹2,000/month for the ₹10,001–₹20,000 wage band, and ₹3,000/month for salaries above ₹20,000 up to ₹1 lakh. Payments last 2 years for all sectors and 4 years for manufacturing.
Q: What is the deadline for the ELI scheme? A: The scheme covers jobs created between August 1, 2025 and July 31, 2027. New hires during this window qualify for benefits, with payments extending beyond the window based on retention (e.g., a hire made in July 2027 receives incentives through July 2029, or July 2031 for manufacturing).
Q: How do employers apply for the ELI scheme? A: Employers register on the PMVBRY portal (pmvbry.epfindia.gov.in) using EPFO employer credentials, provide PAN and bank account details, and hire net additional employees above their August 2024–July 2025 baseline. New hires must be retained for at least 6 months. There is no separate application for employees — benefits are automatic based on EPFO records.
Q: Is the ELI scheme the same as the ₹2 lakh crore PM package? A: No. The ELI scheme (₹99,446 crore) is the largest single component of the wider Prime Minister's package of five schemes announced in Budget 2024-25, which has a total outlay of ₹2 lakh crore targeting 4.1 crore youth over 5 years. The other four schemes cover skilling, internships, and ITI upgrades.
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