How ELI Scheme 2024 Can Boost Job Creation in India?

1. SCHEME A: EMPOWERING FIRST-TIME EMPLOYEES
This sub-scheme focuses on encouraging first-time employment in formal sectors:
• Incentive Structure: Direct Benefit Transfer (DBT) of one month’s salary (up to ₹15,000) in three installments.
• Eligibility: Employees can earn up to ₹1 lakh per month.
• Skill Development: A compulsory financial literacy course for employees before claiming the second installment.
• Employment Stability: Employers must retain first-time employees for at least 12 months; failing which, subsidies must be refunded.
• Impact: Expected to benefit 210 lakh youth with an allocation of ₹23,000 crore.

2. SCHEME B: BOOSTING JOB CREATION IN MANUFACTURING
Designed to incentivize bulk hiring in the manufacturing sector, Scheme B targets employers with a strong hiring track record:
• Eligibility for Employers: Companies must have a three-year EPFO contribution history and hire at least 50 new employees or increase their workforce by 25% over the previous year.
• Incentive Details: Subsidies are provided for four years, calculated at ₹25,000/month for employees earning above ₹25,000/month but under ₹1 lakh/month.
• Conditions: Employers must maintain enhanced employment levels throughout; otherwise, the subsidy ceases.
• Impact: Projected to benefit 30 lakh youth with an allocation of ₹52,000 crore.

3. SCHEME C: SUPPORTING EMPLOYMENT EXPANSION
Scheme C encourages employers to exceed their baseline employment numbers:
• Eligibility: Employers must increase their workforce by at least 2 employees (for smaller entities) or 5 employees (for larger entities).
• Incentive Details: The government reimburses employer contributions (up to ₹3,000/month) for two years.
• High Impact Hiring: For companies creating over 1,000 jobs, subsidies are reimbursed quarterly.
• Combined Benefits: Employers can avail themselves of this subsidy alongside those in Scheme A and B.
• Impact: 50 lakh youth will be expected to get benefits with a central outlay of ₹32,000 crore.

Key Features and Anticipated Impact
• Job Creation: With a focus on youth employment, the ELI Scheme is set to address unemployment challenges by incentivizing sustainable hiring practices.
• Financial Inclusion: Through DBT and financial literacy courses, the scheme ensures that employees are financially empowered.
• Support for Employers: By reducing the cost of hiring, it encourages businesses to expand and innovate.
• The scheme’s multipronged approach—targeting individuals, manufacturing hubs, and large employers—is tailored to bolster India’s economic growth by addressing employment gaps across sectors.