By: Hiranmay Pandya
The much-awaited Employment Linked Incentive (ELI) Scheme, recently approved by the Government of India, is a welcome relief for the country’s workforce. As a trade union, we recognise this as a long-standing demand finally taking shape, a proactive policy that affirms the government’s commitment to employment generation, skill development and formalisation. We commend the Government for launching this first-of-its-kind initiative, which is expected to benefit over 3.5 crore workers including over 1.9 crore first-time workers. Bharatiya Mazdoor Sangh (BMS) sees this as an affirmation of the government’s intent to prioritise workers in the nation-building process.
The ELI Scheme is part of a broader employment support framework that complements existing initiatives such as the government’s internship and skill development schemes launched last year. Together, these programmes aim to improve employability, create formal job pathways, and strengthen labour protections, particularly for youth from Tier 2 and Tier 3 cities, where job access and social security coverage have historically lagged.
By contributing directly to employees accounts, the scheme lowers the cost of formalisation for employers and encourages young, first-time workers to enter the formal workforce, ensuring access to pensions, healthcare and other crucial social security benefits. Furthermore, by offering additional support to the manufacturing sector and MSMEs, it promises to spur job creation while fostering equitable economic growth across regions and communities. This represents not only a new opportunity for workers but a meaningful shift towards dignified, stable and inclusive employment.
Strengthening Workforce Entry and Industrial Relations
The ELI Scheme’s most commendable aspect is its focus on empowering new entrants in jobs through a direct incentive of up to Rs. 15,000, linked to formal employment and financial literacy. For many, this marks their first exposure to structured work environments with contracts, social security, and workplace protections moving from informal to rights-based, dignified employment. BMS has long advocated such transitions that promote worker empowerment.
Formalisation is not just about payroll compliance, it fundamentally changes the nature of the employer employee relationship. Workers who are protected and valued contribute more, stay longer and build trust. For workers, it ensures access to pensions, medical benefits, provident fund savings, and legal recourse when needed. The scheme creates space for meaningful trade union engagement, institutionalised grievance redressal, and a reduction in workplace disputes. In this way, the ELI Scheme is not just about generating employment but also about shaping a more just and participatory world of work rooted in mutual respect and shared growth.
Skilling, Mobility, and Sustained Employment
A key strength of the ELI Scheme is its alignment with India’s broader skilling and employment framework, ensuring employment that is both sustainable and empowering. By linking financial literacy, apprenticeship programmes, ITI reforms and placement-linked skilling, it builds a clear path from skill acquisition to dignified work. Its focus on mobility and career progression not at just job entry but helps young workers remain integrated into formal labour markets, especially amid post-pandemic uncertainties and rapid technological change, ensuring long-term employability and growth.
A Shared Responsibility for National Progress
The ELI Scheme provides the right tools, but its success depends on how all stakeholders viz. unions, the state and others engage with it. The scheme presents an opportunity for trade unions to deepen engagement with newly formalised workers, ensuring they are aware of their rights and can participate meaningfully in shaping their workplaces. Stronger workplace democracy, improved labour-management dialogue and collaborative problem-solving must be promoted alongside job creation.
Looking ahead, the ELI Scheme will play a vital role in India’s development vision. As we progress toward Viksit Bharat@2047, the aim must go beyond growth or industrial expansion to include the creation of a workforce that is skilled, protected, motivated, and formally integrated into the economy.
The ELI Scheme aligns with this vision, laying the foundation for a future where youth are empowered and industrial relations are cooperative. BMS applauds this visionary step and extends its constructive support for the betterment of workers and the nation.
The writer is President, Bharatiya Mazdoor Sangh
Courtesy PIB, Srinagar
