In a latest development, the Finance Minister Nirmala Sitharaman said that part of the funds allocated for the Employment Linked Incentive (ELI) has already been issued to the Ministry of Labour and Employment, and Ministry of Corporate Affairs.
New Employment Linked Incentive Scheme
Interestingly, this announcement comes after the Union Budget 2024 with only eight more months of the current financial year left for the implementation of the policies.
So far Rs. 2,000 crores has been provided to the corporate affairs ministry for enabling internships to youth across 500 companies.
Under the ELI scheme, the labor ministry has received Rs. 10,000 crore for the enactment of the other policies.
This scheme has three categories as mentioned below.
Scheme A – First Month’s Wage Subsidy Offered by the Government
Under this scheme, a first-time employee with a monthly salary of up to Rs. 1 lakh is eligible to get up to Rs. 15,000 in three installments.
But, the candidate is required to undergo an online Financial Literacy course for drawing the second installment.
It is noteworthy here that this subsidy is to be refunded by the company if the employment of the candidate terminates in less than 12 months.
Further, this scheme is expected to cover about 1 crore employees and will last for 2 years.
Scheme B – Creation Of Job in Manufacturing
Under this scheme, the employers in the manufacturing domain having a minimum of a three-year track record of EPFO contribution will be eligible.
But there is a condition where the employer must hire at least 50 previously non-EPFO workers or 25% of the baseline (the previous year’s number of EPFO employees), whichever one is lower.
For this the EPFO-registered direct payroll (in-sourced) employees with a monthly salary of up to Rs. 1 lakh will be eligible.
This subsidy will be paid for four years and will be divided between the employee and the employer equally.
When it comes to the calculation, It will be 24% of the salary or wage for 1 and 2 years each, 16% for 3 years and 4% for 8 years.
With the help of this scheme, the employer will enjoy this subsidy in addition to the one listed under Scheme A.
Still, the employer will have to refund the subsidy amount if the said employee’s tenure terminates within a year.
Scheme C – Creating Support To Employers
In this scheme, any company that increases employment from the baseline by at least two employees (for those with less than 50 employees) or 5 employees (for those with 50 or more employees) will be eligible.
The government will reimburse EPFO employer contributions of up to Rs. 3,000 per month for the next two years.
In case a company generates more than 1000 jobs, reimbursement will be done quarterly for the previous quarter.
It is noteworthy here that those being covered under Scheme B will not be able to avail of this scheme.
However, those availing of Scheme A may enjoy this as an additional benefit.
When it comes to the eligibility of the employees, people with less than Rs. 1 lakh monthly salary but not necessarily new entrants to EPFO will be eligible under this scheme.
