India is at a pivotal point in its economic journey. With a renewed push towards formalization of workforce, job creation incentives, and a focus on youth employment boost, the government is offering one of the most significant employment support schemes to date – the Employment Linked Incentive (ELI) Scheme 2025, now integrated with the PM Viksit Bharat Rozgar Yojana (PM-VBRY).

For MSMEs, SMEs, and particularly labour-intensive manufacturers, this is more than just a policy, it’s a powerful cost-saving and compliance-enabling opportunity. With a budget outlay of INR 99,446 crore, this initiative is designed to reduce the unemployment rate, boost female labor force participation, and drive inclusive and sustainable employment.

Let’s break down the benefits, eligibility, and strategic value of the ELI Scheme 2025 – and why your organization should act now.

A New Era for Job Creation and Growth

In light of India’s economic recovery, creating jobs continues to be a primary national objective. Initiatives such as PM Viksit Bharat Rozgar Yojana (PM-VBRY) are a calculated attempt to lower the unemployment rate, particularly for women and young people, while increasing the number of people who are officially employed.

MSMEs and manufacturing sector employment play a pivotal role in driving this momentum. These segments are not only labor-intensive but also the largest contributors to India’s industrial output and exports.

Enter the Employment Linked Incentive (ELI) Scheme 2025 – a central initiative offering direct financial benefits to employers who generate formal employment and enroll workers into EPFO registration for the first time. This is not just a policy nudge, it’s a reform driving workforce formalization.

What is the ELI Scheme 2025 (PM-VBRY)?

Launched as an extension of the Atmanirbhar Bharat Rozgar Yojana, the ELI Scheme 2025 under PM Viksit Bharat Rozgar Yojana (PM-VBRY) is a job creation incentive that offers wage support for new formal jobs. It is applicable to eligible employers who create new jobs by hiring employees in the formal sector.

The core idea: encourage companies to onboard first-time employees, especially those who have never been part of the EPFO (Employees’ Provident Fund Organisation), by reimbursing their EPF contributions.

Key Highlights:

• EPF contributions are disbursed via Direct Benefit Transfer (DBT) to both employers and employees.
• The scheme offers coverage for up to 24 months, extended to 48 months for the manufacturing sector.
• Applicable across manufacturing, retail, logistics, and MSME sectors.
• The program supports the goals of Make in India, Skill India, and Digital India.

Why ELI Scheme Matters to HR, Finance, Compliance, and Legal Heads

Each function stands to gain strategic advantages from the ELI Scheme:

For HR Heads:

• Easier to formalize blue/grey-collar workforce.
• Reduced resistance from candidates due to net take-home protection via wage support.
• Aligns with HR goals of structured hiring and social security integration.

For Finance Heads:

• Significant cost-per-hire reduction through EPF reimbursements.
• Budget-friendly workforce expansion, particularly for projects requiring ramp-ups.

For Compliance Heads:

• Strengthened labour law compliance, aiding clean audits and inspections.
• Alignment with requirements for Aadhaar seeding, UAN generation, and EPFO registration.

For Legal Teams:

• De-risk onboarding and minimize exposure to penalty for non-registration or misclassification.
• Transparent and traceable hiring backed by Direct Benefit Transfer (DBT) records.

Who is Eligible for the ELI Scheme?

To avail benefits under the Employment Linked Incentive, employers and employees must meet specific criteria:

Employer Eligibility:

• Registered under EPFO with valid LIN
• Net addition to formal workforce (new job creation, not replacement)
• Timely monthly PF filings and compliance
  

Employee Eligibility:

• Monthly wage up to ₹1,00,000
• No prior EPFO registration (i.e., first-time employee benefit)
• UAN and Aadhaar seeding mandatory
• Continuous employment for a minimum of 6 months
  

Industry agnostic expertise covering:

•   Manufacturing sector employment
•   Logistics and supply chain
•   Garment and textile
•   Retail, MSMEs, and other labor-intensive industries

Benefits of the ELI Scheme

The ELI Scheme 2025 isn’t just another government compliance initiative – it’s a strategic tool for SMEs looking to scale efficiently.

1. Government-Backed Wage Support

• Employers can receive up to 24% of employee wages as a reimbursement through PF contribution support.
• Monthly hiring incentives of ₹1,000 to ₹3,000 per employee are available for salaries up to ₹1 lakh.
• Manufacturing companies benefit longer, with incentives extended up to 4 years.

2. Low Cost of Hiring

• Government incentives reduce the total cost of employing new staff in all industries.
• These funds are particularly beneficial for firms undertaking mass hiring or periodic ramp-ups.
• It also makes it easier for businesses to attract young and entry-level job seekers.

3. Transparent and Efficient Disbursement

• All payments are processed through a secure Direct Benefit Transfer (DBT) system for full transparency.
• Employers receive payment through PAN-linked bank accounts and employees are paid through Aadhaar-linked accounts.
• This direct model eliminates delays and reduces administrative overhead.

4. Improved Compliance and Brand Image

• Participation in the scheme ensures better alignment with labor and social security regulations.
• Businesses have higher credibility in reviews and client audits.
• A company’s reputation is improved and stakeholder trust is increased through strong compliance.

5. Promoting CSR and ESG Goals

• The scheme supports youth employment and aligns with national skilling initiatives.
• It encourages gender diversity by promoting higher female labor force participation.
• Employers contribute to inclusive and sustainable economic growth.

6. Sector-Specific Advantage: Manufacturing Focus

• The manufacturing employers can get hiring incentives for a period of up to four years, which is twice the normal duration.
• This long-term support is best suited for labor-intensive scale-focused industries.
• It promotes formal job creation and strengthens India’s industrial workforce.

Why comply360° is Your Ideal Partner

It can be difficult to navigate the complexities of Aadhaar seeding, compliance filings, EPFO registration, and claim procedures. That’s where comply360°comes in!

With almost three decades of experience in labour law compliance, payroll management, and HR advisory, we offer:

1. End-to-End ELI Advisory

• Eligibility mapping, documentation, and submission
• Real-time tracking of Direct Benefit Transfer (DBT) claims
• Ongoing compliance support

2. Sector-Specific Expertise

• Deep experience in MSMEs, manufacturing, logistics, and various other sectors
• Local presence across India for state-level support

3. Integrated Compliance Solutions

• Align your hiring incentives with PF, ESI, minimum wage, and labour laws
• Avoid duplication of processes and reduce internal workload

Choosing comply360° means peace of mind and assured returns – both in cost and compliance.

Conclusion

The Employment Linked Incentive (ELI) Scheme 2025 is a unique instance when policy and profitability align. It serves your business objectives directly: cost reduction, compliance, better employee benefits, and synchronization with national employment missions such as PM Viksit Bharat Rozgar Yojana (PM-VBRY).

Since the scheme is effective only up to July 31, 2027, there is little time to lose. Each month of delayed implementation means loss of savings and lost opportunities.

If you’re looking to scale, hire smarter, and comply better – ELI isn’t just an option, it’s an advantage.

Ready to Tap into Government-Backed Hiring Incentives?

Book your free consultation with our experts today and discover how much you can save and scale with the ELI Scheme 2025.