Archive · 2 Aug 2025
Economists Doubtful of India's Job Scheme's Success
Imagine the government wants to help people get jobs!
They created a plan called ELI, offering money to companies that hire new workers.
It also gives money directly to new employees.
However, some experts are worried.
They think the plan might not work because it mainly helps big companies, and they might not hire many new people.
They also worry about whether the jobs will be good ones with fair pay and benefits.
Some think the government should help small businesses instead, since they often create more jobs.
The plan aims to create a lot of jobs, but people are unsure if it will succeed.
The Employment Linked Incentive (ELI) Scheme aims to create 35 million jobs in the formal sector over two years.
The scheme includes cash transfers for new employees and employers registered with EPFO.
Economists and trade unions express skepticism about the scheme's ability to generate jobs.
Concerns exist regarding the scheme's focus on large companies and potential impact on MSMEs.
The scheme's effectiveness in enhancing employability and social security is also questioned.
- Who
- The Union Cabinet.
- What
- The Employment Linked Incentive (ELI) Scheme.
- When
- Approved early July.
- Where
- Not specified.
- Why
- To create new jobs in the formal sector.
Concerns about the ELI Scheme
Support for ELI Scheme
Focus on Companies
Concerns about the ELI Scheme
The scheme favors large establishments which may not lead to job creation.
Support for ELI Scheme
The ELI's focus on manufacturing is positive because that sector is struggling.
Economic Approach
Concerns about the ELI Scheme
There is skepticism about the government's approach to stimulate the economy.
Support for ELI Scheme
The government should have addressed falling demand by fiscal stimulus.
Mechanism
Concerns about the ELI Scheme
The scheme has no mechanism to confirm fresh hirings.
Support for ELI Scheme
Existing employers get subsidies.
- Scheme Name
- Employment Linked Incentive (ELI) Scheme
- Outlay
- `99,446 crore
- Employee Incentive
- `15,000 a year for new hires
- Employer Incentive
- `1,000-3,000 monthly for new hires
- Targeted Jobs
- 35 million over 2 years
- Salary Limit
- `1 lakh a month