Employment Linked Incentive Schemes:Three Employment Scheme| New Budget 2024

The Indian government has introduced three new Employment Linked Incentive Schemes in the Budget 2024-25 to enhance job creation and support both employers and first-time employees. These schemes aim to boost formal sector employment and provide financial benefits to new employees while also offering incentives to employers.

The Employment Linked Incentive Schemes were unveiled to address the challenge of unemployment by encouraging the hiring of first-time employees and supporting job creation in key sectors. The Budget 2024-25 outlines these initiatives as a strategic move to stimulate job growth and economic stability.

The three schemes are:

1. Scheme A – First-time Employment: Provides incentives for hiring new employees.
2. Scheme B – Job Creation in Manufacturing: Targets job creation specifically in the manufacturing sector.
3. Scheme C – Support to Employers: Offers support to employers who increase their workforce

Objectives

• Boost Employment: Encourage employers to hire more staff.
• Support New Employees: Provide financial assistance to first-time employees.
• Enhance Job Creation: Focus on sectors with significant job creation potential.

Eligibility Criteria

1. For First-time Employment Scheme:
   • New employees with a salary up to Rs. 1 lakh per month.
   • Must be enrolled with EPFO.
   • Employees must complete a mandatory Financial Literacy course before receiving the second instalment of the benefit.
2. For Job Creation in Manufacturing Scheme:
   • Applicable to employers with a history of EPFO contributions.
   • Employers must hire a specified number of non-EPFO enrolled workers.
   • Employees must earn up to Rs. 1 lakh per month.
3. For Support to Employers Scheme:
   • Employers increasing employment above baseline numbers.
   • Employees’ salaries should not exceed Rs. 1 lakh per month.
   • New employees need not be newly enrolled in EPFO.

Benefits

1. For First-time Employment Scheme:
   • Up to Rs. 15,000 in direct benefits to new employees in three instalments.
   • Encourages financial literacy and long-term employment.
2. For Job Creation in Manufacturing Scheme:
   • Financial incentives based on EPFO contributions, with varying percentages over four years.
   • Aims to boost employment in the manufacturing sector.
3. For Support to Employers Scheme:
   • Reimbursement of EPFO contributions up to Rs. 3,000 per month for additional employees.
   • Continuous benefits for employers creating significant job numbers.

Required Documents

1. For All Schemes:
   • Proof of EPFO enrolment.
   • Employee’s salary details.
   • Employer’s documentation of hiring and employment numbers.
2. For First-time Employment Scheme:
   • Completion certificate of Financial Literacy course.

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How to Apply

1. First-time Employment Scheme:
   • Employers and employees must register with EPFO.
   • Employees must complete the Financial Literacy course to claim benefits.
2. Job Creation in Manufacturing Scheme:
   • Employers need to apply through the designated government portal, showing proof of new hires and EPFO contributions.
3. Support to Employers Scheme:
   • Employers can claim reimbursement through the government’s online application system, maintaining records of increased employment.

The Employment Linked Incentive Schemes introduced in the Budget 2024-25 represent a significant step towards enhancing job creation and providing support to both employers and employees. By offering financial benefits and incentives, these schemes aim to improve employment rates and boost the formal sector’s growth.