Which of the following statements relating to the recent steps taken by the Government of India under the ‘Employment Linked Incentive (ELI) Scheme’ is/are correct ? 1. ELI Scheme has an outlay of about ₹ 1 lakh crore. 2. Establishments registered with the EPFO are required to hire at least two additional employees (with fewer than 50 employees) or five additional employees (with 50 or more employees), on a sustained basis for at least six months, to avail benefits under the ELI Scheme. Select the answer using the codes given below :

Correct — C, (c) Both 1 and 2. Both statements about the Employment Linked Incentive Scheme are accurate.

STATEMENT 1 — 'ELI Scheme has an outlay of about ₹ 1 lakh crore.' CORRECT. The Union Cabinet approved the Employment Linked Incentive Scheme on 1 July 2025 with an outlay of ₹ 99,446 crore — which is 'about ₹ 1 lakh crore', and the statement's hedge is what makes it accurate rather than approximate. The scheme is intended to incentivise the creation of more than 3.5 crore jobs over two years, of which about 1.92 crore beneficiaries would be first-time entrants to the workforce, and its benefits apply to jobs created between 1 August 2025 and 31 July 2027.

STATEMENT 2 — the hiring condition for establishments. CORRECT, and it reproduces Part B of the scheme almost word for word. Establishments registered with EPFO are required to hire at least TWO additional employees where the employer has FEWER THAN 50 employees, or at least FIVE additional employees where the employer has 50 OR MORE employees, on a sustained basis for at least six months, in order to avail benefits. The Government then incentivises the employer up to ₹ 3,000 a month for two years for each additional employee kept in sustained employment for at least six months.

The two bracketed conditions in that statement must stay paired with their own headcounts. Two additional employees goes with fewer than fifty; five additional employees goes with fifty or more. The same numeral 50 appears in both brackets with opposite comparators, which is what makes the statement easy to misread and easy to misremember, and it is the natural place for a setter to introduce an error in a future paper.

The scheme's other half is worth knowing beside it. Part A is aimed at FIRST-TIME EMPLOYEES registered with EPFO and offers one month's EPF wage up to ₹ 15,000 in two instalments, for employees with salaries up to ₹ 1 lakh — the first instalment after six months of service and the second after twelve months and the completion of a financial literacy programme.

Both statements being correct, the answer is (c).

Why the others are wrong

• (a)1 only — This accepts the outlay and rejects the hiring condition, but the hiring condition is stated correctly. Part B of the scheme requires an EPFO-registered establishment to hire at least two additional employees where it has fewer than fifty employees, or at least five where it has fifty or more, and to sustain that employment for at least six months. The threshold structure is deliberate: a small employer cannot reasonably be asked to add five people, so the requirement scales with size, and the six-month sustained-employment condition prevents an employer from claiming the incentive on hiring that is immediately reversed. Everything in the statement, down to the pairing of the numbers with the brackets, matches the scheme as approved.
• (b)2 only — This accepts the hiring condition and rejects the outlay, but ₹ 99,446 crore is properly described as 'about ₹ 1 lakh crore'. The word 'about' is doing real work in the statement, and a candidate who insists on the exact figure may reject a correct statement for being rounded. The habit worth forming is the opposite one: read the qualifier, and treat a hedged number as correct where the exact figure falls within any reasonable reading of it. Had the statement said 'exactly ₹ 1 lakh crore' or given a different figure outright, it would have been wrong; as printed it is not.
• (d)Neither 1 nor 2 — This rejects both statements, and neither is wrong. It is the option a candidate chooses when the scheme is unfamiliar and the long second statement, with its two bracketed conditions and its mixture of words and digits, looks too specific to be true. In fact its specificity is the sign that it has been taken from the scheme document rather than invented. The way to test such a statement is for internal consistency: the two conditions scale sensibly with the size of the employer, the six-month period matches the sustained-employment requirement elsewhere in the scheme, and nothing in it contradicts anything else. A long statement is not a suspicious one.

The Employment Linked Incentive Scheme, approved by the Union Cabinet on 1 July 2025 with an outlay of ₹ 99,446 crore, is built on EPFO's registration system and pays employers and first-time employees for jobs that actually appear on the EPF rolls. It has two parts. PART A, for first-time employees registered with EPFO and drawing salaries up to ₹ 1 lakh, gives one month's EPF wage up to ₹ 15,000, paid in two instalments — the first after six months of service and the second after twelve months and the completion of a financial literacy programme. PART B, for employers, requires an EPFO-registered establishment to hire at least two additional employees where it has fewer than fifty employees, or at least five where it has fifty or more, sustained for at least six months, and pays the employer up to ₹ 3,000 a month for two years for each such additional employee. The scheme targets the creation of more than 3.5 crore jobs over two years, of which about 1.92 crore would be first-time entrants, and applies to jobs created between 1 August 2025 and 31 July 2027, with special emphasis on manufacturing. Two features are worth noting for what they say about policy design. First, using EPFO enrolment as the trigger makes the incentive a formalisation instrument as much as an employment one, since an employer claiming it must bring the worker into the social-security system. Second, the sustained-employment condition and the staggered instalments are both devices against churn — paying only for jobs that last.

Key facts

• The Employment Linked Incentive Scheme was approved by the Union Cabinet on 1 July 2025 with an outlay of ₹ 99,446 crore.
• It aims to incentivise the creation of more than 3.5 crore jobs over two years, of which about 1.92 crore beneficiaries would be first-time entrants to the workforce.
• Its benefits apply to jobs created between 1 August 2025 and 31 July 2027.
• Part A — first-time employees registered with EPFO, with salaries up to ₹ 1 lakh, receive one month's EPF wage up to ₹ 15,000 in two instalments.
• The first instalment is payable after six months of service and the second after twelve months and the completion of a financial literacy programme.
• Part B — establishments registered with EPFO must hire at least two additional employees where the employer has fewer than 50 employees, or at least five where the employer has 50 or more.
• The additional employment must be sustained for at least six months.
• The Government incentivises the employer up to ₹ 3,000 a month for two years for each additional employee in sustained employment for at least six months.
• The scheme places special emphasis on the manufacturing sector.

Common traps

• Rejecting a hedged figure. 'About ₹ 1 lakh crore' correctly describes ₹ 99,446 crore.
• Swapping the bracketed conditions. Two additional employees goes with fewer than fifty; five with fifty or more.
• Rejecting a long statement for being too specific. Length usually indicates it was taken from the source.
• Confusing the ₹ 15,000 EPF wage cap in Part A with the ₹ 3,000 a month employer incentive in Part B.

• practice — not a real PYQ

  Under Part A of the Employment Linked Incentive Scheme, a first-time employee registered with EPFO receives one month's EPF wage subject to a maximum of :

  • (a)₹ 3,000
  • (b)₹ 10,000
  • (c)₹ 15,000
  • (d)₹ 1,00,000

  Answer(c) ₹ 15,000

• practice — not a real PYQ

  Under Part B of the Employment Linked Incentive Scheme, an EPFO-registered establishment with 60 employees must hire at least how many additional employees, on a sustained basis for at least six months, to avail benefits ?

  • (a)Two
  • (b)Three
  • (c)Five
  • (d)Ten

  Answer(c) Five