India’s federal cabinet has approved a ₹1 trillion ($11.7 billion) Employment-Linked Incentive (ELI) scheme to generate 35 million new jobs between August 2025 and July 2027.
Under the plan, first-time workers will receive one month’s salary, capped at ₹15,000 ($175). Employers who retain new employees for at least six months will get up to ₹3,000 per month for two years per hire. The manufacturing sector will benefit from an extension of incentives for two additional years beyond the core timeline.
The scheme, first unveiled by PM Narendra Modi in July 2024, is part of a ₹2 trillion, five-year budget aimed at job creation and skills training. It was accelerated after the ruling party lost ground in recent elections, signaling an urgent focus on employment.
Despite robust GDP growth of over 8% annually, India still faces high unemployment levels, especially among youth. As of May, the urban youth jobless rate stood at 17.9%, while rural youth unemployment reached 13.7%. Placing nearly 19.2 million first-time job seekers at the centre of this push, the scheme hopes to ease mounting job-market pressures.
To ensure accountability and effective rollout, the government is expected to set up robust monitoring mechanisms with minimal red tape. This initiative echoes previous PLI manufacturing incentives and aims to shift informal workers into formal jobs with better pay and benefits .