THE DOUBTFUL JOB PROMISE

The new ₹99,446 crore incentive to create 35 million new jobs in the formal sector over two years pins too much hope on big companies

- BY PRASANNA MOHANTY

THE EMPLOYMENT LINKED

Incentive (ELI) Scheme, approved by the Union Cabinet early July, to create new jobs in the formal sector has failed to enthuse economists and trade unions. The scheme may not achieve its objective of generating 35 million jobs over two years in its current form or enhance employability and social security, they say.

The scheme, with an outlay of ₹99,446 crore, has two components. One offers ₹15,000 a year to first-time employees in two instalments over 12 months. The other offers ₹1,000-3,000 to employers every month for two years (for manufacturing, this extends up to four years) for every additional hiring for at least six months. Both are cash transfers for new employees (up to ₹1 lakh a month salary) and establishments registered with the EPFO. This makes the scheme exclusive for the formal sector.

THE RIGHT SOLUTION?