Employment Linked Incentive Scheme 2026
The Employment Linked Incentive Scheme is a central government scheme that is focused on strengthening job creation in India. It is a scheme that is approved by the 2024-25 Union Cabinet chaired by the Prime Minister of India. The scheme is designed to enhance employability and social security among all sectors, placing greater emphasis on the manufacturing sector.
Benefits of the Employment Linked Incentive Scheme
The Employment Linked Incentive Scheme is a government initiative that presents great opportunities to create more jobs and social security in various sectors across the nation. The scheme is an effective tool that benefits employees and employers in the country through incentives and other features that specifically target these groups.
Features of the Employment Linked Incentive Scheme
The new Employment Linked Incentive Scheme is an innovative scheme that aims to support employment generation through its various notable features. It is designed to incentivize the creation of more than 3.5 crore job opportunities in India over the course of 2 years. The scheme has an outlay of Rs. 9.446 crore and will benefit the first-time employees and employers. The key features of this scheme are as follows:
- Incentives for the First-time Employees: The scheme is divided into two parts. The first part, which is Part A, includes the incentives for first-time employees. Part A prioritises first-time employees registered with the EPFO in the country. The scheme will offer one month's EPF wage up to Rs.15,000 in two instalments. Employees with salaries up to Rs.1 lakh will be eligible to receive this incentive.
The first instalment of the incentive is payable after 6 months of service, and the second, after 12 months of service, after completion of a financial literacy programme by the employee. The scheme also encourages savings by keeping a portion of the incentive in a fixed deposit account. The amount can be withdrawn at a later date after the fixed period.
- Support to Employers: Part B of the Employment Linked Incentive Scheme is designed to support the employers. This part focuses on creating additional employment opportunities, especially in the manufacturing sector. In the case of employees with salaries of up to Rs.1 lakh, incentives will be provided to employers. The employers can receive incentives of up to Rs.3,000 each month for a period of 2 years, for every additional employee with sustained employment for a minimum of 6 months.
In the case of the manufacturing sector, the incentives can be provided for an additional 2 years. Employers who are registered with EPFO and have less than 50 employees will be required to hire at least 2 additional employees for a minimum of 6 months, according to the scheme. For employers with 50 or more employees, the number of additional employees to be hired will be 5.
- This scheme is applicable for jobs that are created between 1 August 2025 to 31 July 2027.
Incentive Structure of the Employment Linked Incentive Scheme
The detailed incentive structure of the Employment Linked Incentive Scheme is as follows:
EPF Wage Slabs of Additional Employee | Benefit to the Employer (per additional employment per month) |
Up to Rs.10,000 | Up to Rs.1,000 |
Above Rs.10,000 to Rs.20,000 | Rs.2,000 |
Above Rs.20,000 to Rs 1 lakh | Rs.3,000 |
Incentive Payment Method for the Employment Linked Incentive Scheme
The incentives for first-time employees which are covered in Part A, will be made via Direct Benefit Transfer (DBT) mode using the Aadhaar Bridge Payment System. On the other hand, incentives for employers in Part B of the scheme will be paid directly to their PAN-linked bank account.
FAQs on Employment Linked Incentive Scheme
- What is the Employment Linked Incentive Scheme?
The Employment Linked Incentive Scheme is a government initiative developed to generate more job opportunities. This scheme was announced in the 2024-25 union budget.
- Who are the primary beneficiaries of the Employment Linked Incentive Scheme?
The primary beneficiaries of the Employment Linked Incentive Scheme are first-time employees, who make up 1.92 crore beneficiaries.
- What are the incentives for employers in the Employment Linked Incentive Scheme?
Employers under the scheme can receive incentives of up to Rs.3,000 each month for a period of 2 years, for every additional employee who has sustained employment for a minimum of 6 months.
- How is the incentive for first-time employees made?
The incentives for first-time employees are made through the Direct Benefit Transfer (DBT) mode using the Aadhaar Bridge Payment System.
- Is the Employment Linked Incentive Scheme applicable to all jobs?
No, the Employment Linked Incentive Scheme is only applicable to jobs created between 1 August 2025 and 31st July 2027.
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