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**Summary:**

The Indian Union Cabinet has approved a ₹99,446 crore Employment-Linked Incentive (ELI) scheme aimed at creating 3.5 crore jobs, primarily in manufacturing, over two years. The scheme, managed by the EPFO, will provide incentives to both new employees (up to ₹15,000 in EPF wages paid in installments) and employers (up to ₹3,000 per month for each additional employee with sustained employment). While employers have largely welcomed the initiative with some reservations, most central trade unions, excluding the BMS, have criticized the scheme, questioning the EPFO’s role, fearing misuse of funds, and highlighting the need to address the underlying economic slowdown. Concerns are also raised about ensuring the benefits reach micro and small enterprises.

**News Article:**

**India Launches Massive Employment Incentive Scheme Amidst Mixed Reactions**

**New Delhi, July 6, 2025** – The Union Cabinet has greenlit a substantial ₹99,446 crore Employment-Linked Incentive (ELI) scheme, a key promise from the 2024-25 budget, designed to boost job creation, particularly within the manufacturing sector. The initiative, spearheaded by Prime Minister’s broader employment package, aims to generate over 3.5 crore jobs over the next two years, starting August 1st, 2025, and concluding July 31st, 2027.

The scheme, to be implemented by the Employees Provident Fund Organisation (EPFO), offers incentives to both newly hired employees earning up to ₹1 lakh (₹15,000 in EPF wages paid in two installments) and employers (up to ₹3,000 per month per additional employee with sustained employment). The government anticipates that 1.92 crore newly employed individuals will directly benefit.

Industry leaders have largely welcomed the ELI scheme. Subhrakant Panda, former president of FICCI, lauded it as a “laudable initiative” driving manufacturing employment. CII’s Sachit Jain echoed this sentiment, highlighting its potential to reshape India’s employment landscape. However, Laghu Udyog Bharati, representing small businesses, urged the government to ensure that micro and small manufacturing units, particularly those with fewer than 20 employees, are included in the scheme’s benefits. K.E. Raghunathan, founder of the Association of Indian Entrepreneurs, proposed streamlining the reimbursement process through the Ministry of MSME.

Despite industry optimism, the initiative faces opposition from the majority of central trade unions. While the RSS-backed Bharatiya Mazdoor Sangh (BMS) has cautiously welcomed the scheme, other unions have expressed concerns about potential misuse of funds, citing past issues with the Production-Linked Incentive scheme. A major point of contention revolves around the EPFO’s role in the scheme’s implementation, with unions questioning its capacity to manage and disburse funds effectively, as it is traditionally a custodian of employee savings. They suggested an independent agency could serve as a better medium. Critics argue the government needs to tackle the larger economic slowdown and focus on measures that improve worker purchasing power.

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