'To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.'
People landing their first job in the private sector will get government support of Rs 15,000, Prime Minister Narendra Modi said in his Independence Day address on Friday, as he announced the launch of the Prime Minister Viksit Bharat Rozgar Yojana (PM-VBRY).
The scheme, with an outlay of Rs 1 trillion, aims to help 35 million youth in the country.
Companies, too, will get government support as they create job opportunities for the youth, the PM said.
'The scheme is slated to benefit 35 million youth. I congratulate all the young people in the country,' he said.
The scheme, erstwhile known as Employment Linked Incentive (ELI) scheme, was announced in the Union Budget last year by Finance Minister Nirmala Sitharaman as part of the prime minister's package to facilitate skilling and job creation in the country.
On July 1, the Union Cabinet approved the ELI scheme. The benefits of the scheme would be applicable to jobs created between August 1, 2025, and July 31, 2027.
The PM-VBRY consists of two parts with Part A focused on first timers and Part B focused on employers.
Under part A, one-month EPF wage up to Rs 15,000 in two instalments will be given to first-time employees registered with the Employees Provident Fund Organisation (EPFO).
Employees with salaries up to Rs 1 lakh will be eligible.
The first instalment will be payable after six months of service and the second will be payable after 12 months of service and completion of a financial literacy programme by the employee.
'To encourage the habit of saving, a portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date,' the labour ministry had said in a statement earlier.
'This will benefit around 19.2 million fresh beneficiaries entering the workforce,' the ministry added.
Part B will cover generation of additional employment with salaries up to Rs 1 lakh in all sectors, with a special focus on the manufacturing sector.
The government will incentivise employers registered with EPFO, up to Rs 3,000 per month, for two years, for each additional employee with sustained employment for at least six months.
For the manufacturing sector, incentives will be extended to the third and fourt year as well.
Employers (with less than 50 employees) will have to add at least two or five additional employees (in case of 50 or more employees) to avail benefits.
"In the Budget, three ELI schemes were announced. However, the second and third schemes have a lot of overlap, hence they have been condensed as Part B. All other parameters remain the same," said an official requesting anonymity.
The Prime Minister Internship scheme, another component of the package announced last year, had its first round of pilot run between October and December 2024.
With more than 600,000 applications received, 127,000 internship opportunities were posted by 280 top companies covering 745 districts, of which over 82,000 internship offers were made to candidates.
In the round II of the internship scheme, till now more than 120,000 internships have been offered with participation from 327 reputed companies.
In May, the Union Cabinet also approved the Rs 60,000 crore Industrial Training Institute (ITI) upgradation scheme, with focus on 1,000 government ITIs in hub and spoke arrangement with industry aligned revamped trades.
Of the Rs 60,000 crore to be spent under the scheme, the Centre would contribute Rs 30,000 crore, the state's share would be Rs 20,000 crore and industry would pitch in Rs 10,000 crore.
Feature Presentation: Ashish Narsale/Rediff
