Eleven Years to Implement ELI

 

 

True , it was in Feb 2014 that I sent a Email to our Cabinet Ministers , suggesting that :

Ø  As far as Employer Companies are concerned , we must celebrate “ BIG-ness “

Ø  We should incentivize Companies which employ a large workforce, through reduction of Corporate Income Tax

Following are the details of my suggestion > Create Wealth to Create Jobs  … 26 Feb 2014

 

Extract :

To complete this ECO SYSTEM , we  need to think " Out of the Box " in the matter of Corporate Tax Regime , as well

 Current trend in industry , all over the world , is to :

>  Add highly productive , very expensive machinery to " Automate " all manufacturing processes

 >  Reduce manpower by increasing " Capital / IT Intensity "

 >  Hire low skilled workers by transferring higher " Skills " to machinery

 >  Outsource manufacturing to countries where manpower is cheap

 >  Move out of " Manufacturing " and shift to " Services "

 

 India cannot swim against this World-wide trend

 We must innovate,  to not only survive but to grow in this scenario

  

Here is my suggestion :

 

 Set in motion , " INVERSION  of JOB  REDUCTION " regime , under which ,

  

"  The more jobs a company creates , the less Corporate Tax it pays "

 

Example :

 

 > Up to employment of 100 persons  ............................... 30 %

 

> 101  -  500 persons....................................................  25  %

 

>  501 - 1000 persons ...................................................  20  %

 

>  1001 - 5000 persons ..................................................  15  %

 

>  5001 - 10,000 persons ................................................. 10  %

 

>  Above 10,000 persons .................................................    5  %

 

 

Let us celebrate those who provide employment to large number of persons

 

Let us celebrate BIGNESS

 

Let us create hundreds of  WORLD SIZE corporations and take on the World

 

On top of this , provide additional tax - breaks ( discounts ? ) to corporate as follows :

 

> Average Age of Employees at 30 years.......................  1 %

 

> Ave age at 25 years.................................................  2 %

 

> Ave age at 20 years .................................................  3 %



Of course , very strict and transparent rules will need to be framed to compute,


>  Number of Employees  ( Permanent - not probationers / trainees )


> Average Age ( as on 31 March of Tax year )......etc

 

 

 

Then today, I felt elated that after a gap of 14 years, Govt. seems to have read my suggestion !

Take a look at the following Release of Press Information Bureau , re: ELI

ELI embodies the principle of “ Incentivizing “ companies to hire more employees. Although the “ Ends “ are the same , the “ Means “ are different

I believe , as compared to my proposal, the ELI Scheme announced by Govt. would be :

Ø  Quite cumbersome

Ø  Difficult to implement  

Ø  Litigious

But then “ Something is better than Nothing “ / “ A poor decision is better than No Decision “

If we realize that some aspect ( of ELI ) is not working out well , we can always make a course-correction

But without waiting to watch the actual performance of the Scheme , even at this stage , I strongly recommend that Govt stipulate the following “ Eligibility Criteria “ :

Ø  Only those Companies which implement “ From BAD to MAD … 01 June  2016  “ , will be eligible for the scheme

 

Dear Prime Minister Shri Modiji :

 

In your LinkedIn post yesterday , you wrote :

“The next decade will be even more transformative. We are moving from digital

governance to global digital leadership, from India-first to India-for-the-world.

To all innovators, entrepreneurs, and dreamers: the world is looking at India for

the next digital breakthrough. “

 

Dear Sir :

 

 From BAD to MAD  is that ,  “ next digital breakthrough “ which will establish

 India “ the Global Digital Leader "

 

Consider the following benefits that will flow from its implementation,

automatically as bye-products :

 

#   For employees , no need to file a separate annual Income Tax Return

 

#   Direct deposit of PF / TDS amounts into bank accounts of Govt Depts

 

#   Direct Benefit Transfer ( DBT ) to every Employer for Stipend Subsidy ,

     based on number of total trainees / apprentices employed

 

#   Total number of employees in India ( category / region / industry )

 

#   Employment Density ( Industry wise / Region wise / Skill wise etc )

 

#   Net Employment Growth Rate ( weekly - monthly / Industry-wise )

 

#   Co-relation with no of persons graduating at various levels

 

#   Data about those Unemployed ( " Graduating " less " Employed " )

 

#   Overtime Statistics ( Use / Abuse )

 

#   Work-hour Analysis ( Ave hours / week - month )

 

#   Wage / Salary Rates ( Rs per hour ) - Industry wise / Region wise

     ( of great interest to Foreign Investors looking to bring down

       manufacturing costs , by outsourcing to India / manufacturing in India )

 

#   Compliance with labour laws / tax laws / Apprentice Act etc

 

#   Job Market Forecasts through BIG DATA ANALYTIC ( region / industry )

 

#   Demographic  Profiles of employees  ( Rural to Urban migration )

 

#   Per Capita Income Growth for persons using MAD app  ( MOM / YOY )

 

#   Changing composition between Blue Collar and White Collar employees

 

As for my earlier ( and subsequent ) suggestion in the matter of “ JOBS –

EMPLOYMENT GENERATION “ , please look up some of my earlier emails at :

Ø  National Jobs Policy : Treasure Hunt  …………….. 15 Dec 2017

 

 

With  regards,

Hemen Parekh

www.IndiaAGI.ai / www.HemenParekh.ai /  www.My-Teacher.in  /  www.HemenParekh.in / 02 July 2025

 

Source : Cabinet Approves Employment Linked Incentive (ELI) Scheme

 

Extract :

 

Posted On: 01 JUL 2025 3:04PM by PIB Delhi

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, has approved the Employment Linked Incentive (ELI) Scheme to support employment generation, enhance employability and social security across all sectors, with special focus on the manufacturing sector.  Under the Scheme, while the first-time employees will get one month’s wage (up to Rs 15,000/-), the employers will be given incentives for a period to two years for generating additional employment, with extended benefits for another two years for the manufacturing sector.  The ELI Scheme was announced in the Union Budget 2024-25 as part of PM’s package of five schemes to facilitate employment, skilling and other opportunities for 4.1 Crore youth with a total budget outlay of Rs 2 Lakh Crore. 

With an outlay of Rs 99,446 Crore, the ELI Scheme aims to incentivize the creation of more than 3.5 Crore jobs in the country, over a period of 2 years.  Out of these, 1.92 Crore beneficiaries will be first timers, entering the workforce.  The benefits of the Scheme would be applicable to jobs created between 01^st August 2025 and 31^st July, 2027.

The Scheme consists of two parts with Par A focused on first timers and Part B focused on employers:

Part A: Incentive to First Time Employees:

Targeting first-time employees registered with EPFO, this Part will offer one-month EPF wage up to Rs 15,000 in two installments.  Employees with salaries up to Rs 1 lakh will be eligible.  The 1^st installment will be payable after 6 months of service and the 2^nd installment 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 Part A will benefit around 1.92 crore first time employees.

Part B: Support to Employers:

This part will cover generation of additional employment in all sectors, with a special focus on the manufacturing sector.  The employers will get incentives in respect of employees with salaries up to Rs 1 lakh.  The Government will incentivize employers, up to Rs 3000 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 3^rd and 4^th years as well.

Establishments, which are registered with EPFO, will be required to hire at least two additional employees (for employers with less than 50 employees) or five additional employees (for employers with 50 or more employees), on a sustained basis for at least six months. 

The incentive structure will be as under:

EPF Wage Slabs of Additional Employee (in	Benefit to the Employer (per additional employment per month)
Up to Rs 10,000*	Upto Rs 1,000
More than Rs 10,000 and up to Rs 20,000	Rs 2,000
More than Rs 20,000 (upto salary of Rs 1 Lakh/month)	Rs 3,000

 *Employees with EPF wages up to Rs. 10,000 will get a proportional incentive.

This part is expected to incentivize employers for the creation of additional employment of nearly 2.60 crore persons.

 

Incentive Payment Mechanism:

All payments to the First Time Employees under Part A of the Scheme will be made through DBT (Direct Benefit Transfer) mode using Aadhar Bridge Payment System (ABPS).  Payments to the Employers under Part B will be made directly into their PAN-linked Accounts.

With ELI Scheme, the government intends to catalyse job creation in all sectors, particularly in manufacturing sector, besides incentivizing youth joining the workforce for the first time.  An important outcome of the Scheme will also be formalization of the country’s workforce by extending social security coverage for crores of young men and women.