The Crossbill News Desk
The Union government has failed to roll out its much-anticipated Employment Linked Incentive (ELI) scheme, announced in the post-election Budget of July 2024, before the close of the 2024–25 financial year on March 31.
The scheme, aimed at encouraging formal-sector job creation by reimbursing salaries and provident fund contributions to eligible private employers, had been allocated Rs 10,000 crore. However, nearly the entire sum has now been surrendered, as the Labour Ministry has yet to secure cabinet approval for the programme.
According to a report by The Telegraph, the Union Labour Ministry told the Parliamentary Standing Committee on Labour that the final draft of the ELI scheme is still under preparation and has not been submitted to the Cabinet.
BJP leader and former Karnataka Chief Minister Basavaraj Bommai, who chairs the committee, urged the ministry to seek clearance this year to avoid further delays.
The ministry’s submission noted that although the scheme had received a nod from the Finance Ministry’s Expenditure Finance Committee (EFC) in January 2025, the draft Cabinet note was still being formulated in consultation with stakeholders, including the Prime Minister’s Office and the Cabinet Secretariat. Of the Rs 11,044.05 crore the ministry surrendered for the fiscal year, Rs 9,999.50 crore was earmarked for the ELI scheme alone.
For the 2025–26 financial year, the ELI scheme has been allocated a significantly higher amount—Rs 20,000 crore. The committee, while expressing disappointment over the missed deadline, recommended that the ministry continue pursuing the necessary approvals and revise its action plan to ensure effective utilisation of funds this year.
The ELI programme comprises three sub-schemes designed to bolster formal employment.
The first offers wage subsidies of up to Rs 15,000 per month for new hires earning below Rs 1 lakh, specifically targeting first-time entrants into the formal workforce.
The second provides a tiered salary reimbursement over four years for employers meeting certain hiring thresholds, offering up to 24% of salaries in the initial two years, tapering to 8% by the fourth year.
The third component reimburses provident fund contributions of up to Rs 3,000 per month for additional employees hired compared to the previous year.
To qualify, firms with fewer than 50 employees must add at least two workers, while larger firms must add five or more.
Despite the government’s ambitious goals, the delay in launching the scheme has drawn criticism, with observers pointing to a gap between policy announcements and execution on the ground.
The scheme, aimed at encouraging formal-sector job creation by reimbursing salaries and provident fund contributions to eligible private employers, had been allocated Rs 10,000 crore. However, nearly the entire sum has now been surrendered, as the Labour Ministry has yet to secure cabinet approval for the programme.
According to a report by The Telegraph, the Union Labour Ministry told the Parliamentary Standing Committee on Labour that the final draft of the ELI scheme is still under preparation and has not been submitted to the Cabinet.
BJP leader and former Karnataka Chief Minister Basavaraj Bommai, who chairs the committee, urged the ministry to seek clearance this year to avoid further delays.
The ministry’s submission noted that although the scheme had received a nod from the Finance Ministry’s Expenditure Finance Committee (EFC) in January 2025, the draft Cabinet note was still being formulated in consultation with stakeholders, including the Prime Minister’s Office and the Cabinet Secretariat. Of the Rs 11,044.05 crore the ministry surrendered for the fiscal year, Rs 9,999.50 crore was earmarked for the ELI scheme alone.
For the 2025–26 financial year, the ELI scheme has been allocated a significantly higher amount—Rs 20,000 crore. The committee, while expressing disappointment over the missed deadline, recommended that the ministry continue pursuing the necessary approvals and revise its action plan to ensure effective utilisation of funds this year.
The ELI programme comprises three sub-schemes designed to bolster formal employment.
The first offers wage subsidies of up to Rs 15,000 per month for new hires earning below Rs 1 lakh, specifically targeting first-time entrants into the formal workforce.
The second provides a tiered salary reimbursement over four years for employers meeting certain hiring thresholds, offering up to 24% of salaries in the initial two years, tapering to 8% by the fourth year.
The third component reimburses provident fund contributions of up to Rs 3,000 per month for additional employees hired compared to the previous year.
To qualify, firms with fewer than 50 employees must add at least two workers, while larger firms must add five or more.
Despite the government’s ambitious goals, the delay in launching the scheme has drawn criticism, with observers pointing to a gap between policy announcements and execution on the ground.
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