The government is likely to notify its flagship employment-linked incentive schemes (ELIs), introduced in the Budget, by early January, in order to boost job creation as well as manufacturing activity, an official source.
The government has undertaken consultations with many stakeholders, and has held over 20 meetings in the past three months to frame the guidelines for the schemes’ implementation, said the source.
The government has consulted industry, employer organisations, employee organisations, different ministries of the government, states & UT officials, Employees’ Provident Fund Organisation (EPFO) officials, research & academic institutions, and multilateral organisations, to formulate guidelines for the scheme.
On Wednesday, at the CII Global Economic Policy Forum, labour secretary Sumita Dawra said that the ELIs will give hiring and employment incentives to both employees and employers, as the additional cost of employing extra workforce will be offset by the government. “I do hope the industry will be looking at the ELIs, and will be using them to make themselves more competitive,” she said.
The Union Budget, presented in July, unveiled three ELIs, which will be implemented through the EPFO. ‘Scheme A’ targets first-time employees in the formal sector registered with EPFO. It offers a one-month wage (up to Rs. 15,000) in three instalments, paid to employees through direct-benefit-transfer (DBT).
‘Scheme B’ focuses on job creation in manufacturing, where it incentivizes both employees and employers for the additional employment of first-time employees, offering benefits based on their EPFO contributions during the first four years of employment. And ‘Scheme C’ provides support to employers by reimbursing Rs. 3,000 per month for two years towards their EPFO contribution for each additional employee with a salary of up to Rs. 1 lakh per month.
Dawra also said that India has a “very strong” manufacturing base in several sectors, which is supported by Make In India, and production linked incentive scheme. “The ELIs will be an addition to these initiatives, and support manufacturing,” she added.
