By Dr. Gyan Pathak
India’s flagship Employment Linked Incentive (ELI) scheme announced in the Union Budget 2024-25 for decent job creation in the country did not take off even in mid-December 2024. Union Ministry of Finance is busy in making next Union Budget 2025-26, which will be tabled on February 1, 2025. India Inc is hesitant in joining the scheme, and Union Ministry of Labour and Employment is also not ready with the details of the scheme, which are likely to be notified in January 2025.
EPFO is being revamped to implement the ELI Scheme. Union Ministry of Labour and Employment has held about two dozen meetings with EPFO officials and India Inc, to prepare the details of the schemes and implementation guidelines since last week of September, almost a month after the ELI Scheme was announced on July 23 in the Union Budget 2024-25. EPFO was ordered to insure that employers complete the first stage of the process of Universal Account Number (UAN) activation through Aadhaar-based OTP by November 30, 2024, starting with the latest joinee employees in the current financial year 2024-25.
It was also said that in the second stage of the process, going forward, UAN activation was to be included in the state-of-the-art facility of Biometric authentication, through Face-recognition Technology. After that the employers will be required to complete the process for all employees working with them.
It should also be noted that the Centre had already issued direction earlier to all ministries and departments to ensure payments of subsidy and incentives to beneficiaries of all schemes through Aadhaar Payment Bridge. Obviously, EPFO also required to ensure it for employers focused ELI scheme purportedly to create decent jobs in the country, since more than 90 per cent of the workforce in India are employed in informal jobs, both in informal sector and formal sector. ELI scheme is for formal sector, but in the last decade large number of them are informally employed through contracts, informally, or through outsourced agencies.
EPFO and the India Inc just failed to complete the first stage of UAN activation by November 30. There was then no option but to extend the date. EPFO then issued a circular on December 4, 2024 extending the last date to link the UAN for the ELI scheme to December 15. Along with the extension of the deadline to activate UAN, the government has also extended the date for the Aadhaar seeding of bank accounts.
EPFO wrote, “Dear Employers, the date of UAN activation and Aadhaar seeding of Bank Account has been extended till 15th December. Ensure to do the same for all employees who have joined in the current financial year, starting with the latest joinees, to avail the benefit of the Employment Linked Incentive scheme.”
It was already expected not only because India Inc was hesitant and very slow in accepting the ELI scheme and not coming forward to complete the first stage of UAN activation by November 30, but also because the Union government is also yet to announce the details of the ELI Scheme.
On December 11, just 4 days before the expiry of the extended date for employers to complete the first stage of UAN activation, Union Labour secretary Ms Sumita Dawra has urged India Inc to leverage the ELI Scheme while speaking at the Global Economic Policy Forum 2024 organised by CII.
Urging industry to collaborate with the government she said, “ELI is designed to incentivise the hiring of additional workers, particularly in the manufacturing sector, by offsetting the cost of employing new workers. … The scheme aims to boost labour formalisation enhance the employability of workers and support job creation in key manufacturing industries.”
Obviously to lure even foreign multinational companies to work in India, she said India’s working age-population will constitute about 65% of its total population by 2030, positioning the country as a key player in addressing global labour shortages.
Union Labour Secretary Ms Dawra also urged India Inc to leverage new technologies, policies and practices to make India a manufacturing powerhouse, citing the example of the country’s growing role as a hub for global capability centres (GCCs) that employ millions of Indians in sectors like engineering, technology and AI to contribute to global innovation while supporting the country’s domestic manufacturing capabilities.
Union Labour Secretary Ms Dawra’s statements clearly show how desperate the Centre is to implement the ELI schemes but not able to push it forward despite the schemes seem on the surface very attractive. Three schemes A, B, and C would give Rs10,000 crore subsidies to employers under ELI scheme through EPFO for every new membership, and it was claimed that it would generate 8 million jobs, apart from skilling 10 million youths over the next five years.
The Union government is struggling to formulate appropriate guidelines for the scheme for the last three months and has held meetings with representatives of employers, employees, research and academic institutions, multilateral organisations, apart from officials of various government ministries and departments including EPFO.
Union labour secretary has said in the CII Global Economic Policy Forum, “I do hope the industry will be looking at the ELIs, and will be using them to make themselves more competitive.” It shows uncertainly about the effectiveness of the ELI scheme in the present form especially in regard to creation of large number of decent jobs in India. (IPA Service)
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