Besides, it also gave its go ahead to the Rs 1 lakh crore research development and innovation (RDI) scheme aimed at providing long-term financing or refinancing with long tenors at low or nil interest rates to spur private sector investment in RDI.
“With the ELI scheme, the government intends to catalyse job creation in all sectors, particularly in the manufacturing sector, besides incentivizing youth joining the workforce for the first time,” it said in a statement.
“An important outcome of the scheme will also be formalization of the country’s workforce by extending social security coverage for crores of young men and women,” it added.
The ELI scheme, announced in the Union Budget 2024-25 as part of PM’s package of five schemes to facilitate employment, skilling and other opportunities for 41 million youth with a total budget outlay of Rs 2 lakh crore, would be applicable to jobs created between August 01, 2025 and July 31, 2027.
Under the scheme, while the first-time employees will get one month’s wage (up to Rs 15,000), the employers will be given incentives for a period of two years for generating additional employment, with extended benefits for another two years for the manufacturing sector. The ministry of labour and employment expects 19.2 million beneficiaries of the scheme to be first timers, entering the workforce while incentives to employers are expected to create additional employment of nearly 26 million persons. The scheme will be implemented by the Employees’ Provident Fund Organisation.
“It’s a promising step towards enhancing employment opportunities. This forward-thinking initiative streamlines the previous framework into two impactful schemes aimed at driving job creation and supporting first-time employees,” Puneet Gupta, tax partner, EY India.
While Part A of the scheme will focus on first timers, Part B will focus on employers.
Under Part A, first-time employees with a salary of up to Rs 1 lakh and registered with EPFO will get one-month EPF wage, up to Rs 15,000, in two installments. The first installment will be payable after six months of service and the second installment will be payable after 12 months of service and completion of a financial literacy programme by the employee.
To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument or deposit account for a fixed period and can be withdrawn by the employee at a later date.
Under Part B, the government will incentivize employers, up to Rs 3000 per month, for two years, for each additional employee with salary up to Rs 1 lakh with sustained employment for at least six months. For the manufacturing sector, incentives will be extended to the third and fourth years as well.
However, establishments, which are registered with EPFO, will be required to hire at least two additional employees (for employers with less than 50 employees) or five additional employees (for employers with 50 or more employees), on a sustained basis for at least six months to avail benefits under the scheme.
EY India estimates that a single employer in the non-manufacturing sector hiring 100 additional employees could receive up to Rs 72 lakh over two years, while a manufacturing sector employer could benefit from an impressive INR 1.44 crore over four years under the scheme.
“ELI is a significant step towards boosting employment and formalizing India’s workforce. It opens doors for first-time job seekers and empowers employers to expand their workforce and gives a decisive push to India’s labour intensive sectors,” Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII) added.
RDI Scheme
The RDI scheme is aimed at encouraging the private sector to scale up research, development, and innovation (RDI) in sunrise domains and in other sectors relevant for economic security, strategic purpose, and self-reliance; finance transformative projects at higher levels of technology readiness levels (TRL), support acquisition of technologies which are critical or of high strategic importance and facilitate setting up of a Deep-Tech Fund of Funds.
NH in Tamil Nadu
The cabinet committee on economic affairs also gave its go ahead to upgradation of a 46.7 km long, two-lane Paramakudi-Ramanathapuram section of national highway in Tamil Nadu into four-lane on Hybrid Annuity Mode (HAM) at a total capital cost of Rs 1,853 crore, including Rs 340.94 crore of land acquisition cost.
This will decongest the existing corridor, improve safety, and cater to the mobility needs of rapidly growing towns such as Paramakudi, Sathirakudi, Achundanvayal and Ramanathapuram in the southern state.
National Sports Policy, 2025
The cabinet also approved the National Sports Policy (NSP) 2025 which will supersede the existing National Sports Policy, 2001, and lay out a roadmap to establish India as a global sporting powerhouse and a strong contender for excellence at international sporting events, including the 2036 Olympic Games.
Under the policy, the government will lay down a robust regulatory framework for sports governance, including a legal framework, develop innovative financing mechanisms and engage private sector participation through PPPs and CSR, leverage emerging technologies, including AI and data analytics, for performance tracking, research, and program implementation and create a national framework with well-defined benchmarks, key performance indicators (KPIs), and time-bound targets.
Content Source: economictimes.indiatimes.com