Representative picture. | Photo Credit: Reuters
The story so far: The Union Cabinet has approved a system of motivation (ELI) associated with employment with the expenditure of Crore 99 446 ₹. The scheme, the promise of the budget 2024-25, is focused on the creation of employment, especially in the manufacturing sector. It is part of the Prime Minister’s package of five programs that facilitate employment, such as internships with large companies and measures to improve youth skills.
What are the key provisions?
According to the Ministry of Labor, ELI motivates more than 3.5 crore jobs for two years. The Center expects that 1.92 crore newly employed people to gain an advantage of a system that is running from 1 August 2025 and ends 31 July 2027. Newly accepted employees with salaries up to 1 lakh will receive an EPF monthly wage up to 15,000 GBP in two installments. EPFO will pay the first installment after six months of service and the second installment after 12 months of service – both as a direct bank transfer. Part of the motivation will be stored in “Savings tool for a fixed period of time and can be downloaded later”. The EPFO equipment will receive up to 3,000 GBP per month for two years, “for each additional employee with permanent employment for at least six months”. The center adds that for the production sector incentives will also be extended to the third and fourth years.
How did employers answer?
Employers welcomed this system with alerts. The former Federation of the Indian Chamber of Commerce and President of the Panda Industry Industry said Eli was a “commendable initiative”. It will manage employment, especially in the manufacturing sector, through an innovative approach that combines support for those who first join the workforce with an incentive for permanent employment, added. CII Sachit Jain has said that the ELI system has the potential to transform the Indian working environment and strengthen the industry -intensive industry. Laghu Udyog Bharati supported by Sangh Parivar pointed out that the focus of the system must be focused on micro, small manufacturing units and sectors of allied services. “We also ask for units with less than 20 employees that make up most are left behind. These units must be included in the benefits of the system,” he requested in a statement.
The founder of the Association of Indian Entrepreneurs, K Raghunathan, told the Hindes that this program must be moved under the Ministry of Mikro, Small and Medium Enterprises, with a structured reimbursement model based on actual wage data replenishment. “For each new employee, the specific percentage of the salary must be paid to employees and the employer as a subsidy directly on the monthly basis if the employee remains in operation. Smile and ensure wider coverage,” he said.
What about trade unions?
All 10 central unions questioned the Bharatiya Mazdor (BMS) system, with the exception of RSS supported RSS. The BMS welcomed the ELI system with the rider that the government must expand the base of social security and improve the quality of employment. Other trade unions are afraid that workers will be used to motivate employers. Centor of the fate of motivation with production from 2020, while a certain industry was the center of the SOP to create jobs, but the money went into the pockets of large companies. They argued that the EPFO had to make a probe and ban certain companies after finding that this program had been abused for employers’ benefits.
What are some concerns?
There are concerns about the role of EPFO in the system. Since the EPFO is only an employee’s savings manager, trade unions ask how it can act as an agency to carry out a system. Since the EPFO has no government funds in its books, there is doubt about the payment of money that could go to the employer or the newly received employee. Since EPFO is not an agency with responsibility for creating jobs, there are requirements for creating a separate system for implementation of the system.
Experts in the field also question why the government does not deal with slowing in the economy, and does not take steps to improve the purchasing power of workers.
Published – 6 July 2025 02:15
