The Wire Staff 
New Delhi: The Union government failed to launch an employment incentive scheme announced in the post-election budget in July last year before the financial year came to a close on March 31.
The scheme was meant to offer salary and provident fund reimbursements to eligible private employers to aid job creation in the country. Rs 10,000 crore had been allocated for the Employment Linked Incentive (ELI) scheme with the aim of boosting new entrants in the formal sector.
However, the Union labour ministry has told the parliament standing committee on labour that it has not yet sent the final draft of the ELI programme to the cabinet for approval and almost the entire sum allocated to the scheme has been surrendered, according to the Telegraph.
Bharatiya Janata Party member Basavaraj Bommai, who heads the standing committee, asked the labour ministry to seek approval for the scheme this year.
The scheme had received the nod of the finance ministry’s expenditure finance committee (EFC) in January this year according to the report tabled in parliament on March 28. “…After the final EFC meeting held on 14.01.2025, Draft Cabinet Note is under formulation in consultation with other stakeholder(s) including PMO & Cabinet Secretariat,” it said.
The ministry told the parliamentary panel that of the Rs 11,044.05 crore it had surrendered during 2024-25, a sum of Rs 9,999.50 crore pertained to the ELI scheme. The allocation for the current financial year, 2025-26, is Rs 20,000 crore, the Telegraph reported.
“The Committee feels that although the funds allocated under ELIS during 2024-25 have been surrendered, the Ministry needs to continue pursuing the matter regarding seeking approval of the Scheme and after the same is approved, revisit the plan of action for utilisation of funds in 2025-26,” the panel recommended.
The ELI)programme comprises three distinct schemes aimed at boosting formal-sector employment. The first scheme offers a wage subsidy of up to Rs 15,000 per month for each new employee earning less than Rs 1 lakh monthly. This benefit is targeted at first-time entrants to the formal workforce.
The second scheme provides a graded salary subsidy over four years to employers who meet specific hiring thresholds. Firms that hire more than 50 first-time workers or 25% of their existing workforce – whichever is lower – are eligible to receive 24% of the employee’s salary for the first two years, 16% in the third year and 8% in the fourth year.
The third scheme reimburses employers for provident fund contributions of up to Rs 3,000 per month for each additional employee hired in the previous year. This is applicable for a period of two years and employers with fewer than 50 employees must add at least two workers, while those with 50 or more must add a minimum of five to be eligible.