The Employment-Linked Incentive (ELI) scheme, introduced in India’s Union Budget 2024, has generated significant interest among industry stakeholders. The scheme is designed to formalize labor by encouraging companies to hire fresh graduates and provide them with job-relevant skills through EPFO registration. It is part of a broader strategy aimed at enhancing employment opportunities in the country.
One of the critical aspects of the ELI scheme is its focus on internships and skill development, with a goal of placing around 1 crore freshers in top companies. This initiative is seen as a significant step towards improving employability, as it combines formal education with on-the-job training. However, there are concerns about the long-term impact of these internships, particularly regarding the job security of interns once their internship period ends.
Industry experts like Rajiv Memani, CEO of EY India, and Sanjeev Bikhchandani, founder of InfoEdge, have expressed mixed views. While they acknowledge the potential benefits of the scheme in bridging the skills gap, they also emphasize the need for careful implementation to ensure that these internships translate into permanent employment opportunities. Moreover, the scheme is expected to benefit around 30 lakh first-time employees in the manufacturing sector over four years, further underlining its potential to stimulate job creation and economic growth.
The government’s focus on formalization and upskilling through the ELI scheme aligns with broader economic goals, but its success will depend on how effectively it is executed, particularly in creating sustainable job opportunities post-internship.
This multifaceted approach is seen as crucial in addressing India’s employment challenges, especially in a rapidly evolving job market where practical skills are increasingly valued over theoretical knowledge. As this scheme unfolds, its impact on both employees and employers will be closely watched.