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 :
With regards,
Hemen Parekh
www.IndiaAGI.ai / www.HemenParekh.ai / www.My-Teacher.in / www.HemenParekh.in / 02 July 2025
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 01st August 2025 and 31st 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 1st installment will be payable after 6
months of service and the 2nd 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 3rd and 4th 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.