Mint Quick Edit | Can India’s ELI scheme generate 35 million jobs?
The Union cabinet has approved an outlay of ₹1 trillion for employment-linked incentives aimed at job generation. Now let’s see if it can alter the recruitment appetite of businesses.
Having been announced in the budget, India’s employment-linked incentive scheme (ELI) now seems ready for roll- out. On Tuesday, the Union cabinet approved an outlay of ₹1 trillion for it with the aim of creating as many as 35 million jobs over two years.
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Under this scheme, first-time employees whose salary is under a certain limit will be given up to ₹15,000 in two instalments and employers will get up to ₹3,000 per month for two years for every additional employee hired and kept employed for at least six months.
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In the manufacturing sector, this incentive will be extended to the third and fourth years as well. With unemployment a big issue among India’s youth, the government is betting that this subsidy will get private businesses to step up recruitment.
But it’s unclear if this alone will suffice. In many cases, recruiters have been going slow because they don’t see sufficient scope for business expansion, with profit growth in focus instead.
Also Read: Headline labour force survey data masks a pressing employment problem
In other cases, the emergence of new AI tools has reduced the need for staff additions. Many ELI applicants are likely to be companies that would have hired anyway. But then, we won’t know if this idea works till it is tested out.
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