Kolkata: Manufacturing continues to be a focus area of the Narendra Modi government. Manufacturing is a focus of the Employment Linked Incentive (ELI) Scheme that was given a nod by the Union cabinet on Tuesday, July 1, with an outlay of Rs 1.07 lakh crore, the target being the creation of 3.5 crore jobs over the next two years. The route: social security schemes run by the EPFO (Employees’ Provident Fund Organisation). The manufacturing sector is a special beneficiary since the employment generation plan incentives will continue in manufacturing sector for double the duration for other sectors.

The ELI scheme approved in the cabinet meeting has two parts. Part B of the scheme had a focus on the manufacturing sector. Under this program, employers will receive incentives for employees who have a compensation of up to Rs 1 lakh. According to the blueprint, the government will pay companies (or employers) up to Rs 3,000 per month, for a period of two years, for any additional employee who will be employed for six months in the minimum. But the manufacturing sector has come in for special treatment especially on this count. For the manufacturing sector, this incentive will be extended for two more years — the third and fourth one.

An official statement has said that companies which are registered with the EPFO, have to hire at least two more employees or five additional employees who will work on a continuous basis for at least six months. The companies with fewer than 50 employees will need to hire at least two additional employees while those firms where 50 or more persons work, will need to hire at least five more employees to be eligible for the scheme.

The ELI Scheme was announced in the Union Budget 2024-25 as part of the prime minister’s package of five schemes to create a climate conducive to employment generation, skilling and other opportunities. The target was a total of 4.1 crore youths and the total budget outlay was Rs 2 lakh crore. The benefits of the Scheme would be applicable to jobs created between 01st August 2025 and 31st July, 2027.

“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a portion of the incentive will be kept in a savings instrument or deposit account for a fixed period and can be withdrawn by the employee at a later date. Part A will benefit around 1.92 crore first-time employees,” the statement said.