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India's ELI Scheme Receives Rs 30,000 Crore Boost in Upcoming Budget

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  Published in Travel and Leisure on Sunday, February 1st 2026 at 19:17 GMT by moneycontrol.com
      Locale: N/A, INDIA

New Delhi, February 2nd, 2026 - Sources indicate the upcoming Union Budget, slated for presentation later this week, is poised to significantly bolster the Employment-Linked Incentive (ELI) scheme, with a projected allocation exceeding Rs 30,000 crore. This substantial increase signals a continued commitment from the government to prioritize job creation and stimulate sustainable economic growth, particularly in a post-pandemic landscape still navigating recovery.

The ELI scheme, launched in September 2023, represents a proactive shift in economic policy, moving beyond broad stimulus packages to targeted incentives designed to directly link financial support to demonstrable employment gains. Unlike previous initiatives that focused primarily on infrastructure or subsidies, ELI requires companies to demonstrably hire new employees to qualify for the benefits, creating a more direct and accountable impact on unemployment figures.

Expanding Beyond Initial Sectors

While the initial rollout of the ELI scheme focused on key manufacturing sectors - particularly those crucial to supply chain resilience and export promotion - the expanded budget allocation hints at a broadening of scope. Early beneficiaries included industries such as electronics manufacturing, pharmaceuticals, and automotive components. However, leaked proposals suggest the 2026 budget will extend the ELI scheme to encompass emerging sectors such as renewable energy, advanced chemistry cell (ACC) battery production, and potentially even the burgeoning green hydrogen industry. This strategic expansion aims to capitalize on global shifts towards sustainability and position India as a leader in these forward-looking fields.

Why the Increased Investment?

The push for a significantly larger ELI budget stems from several converging factors. Firstly, despite positive economic indicators in late 2025, unemployment - particularly amongst educated youth - remains a persistent challenge. The government is under pressure to deliver on its promises of economic opportunity and address this critical social issue. Secondly, geopolitical uncertainties and ongoing supply chain disruptions have highlighted the importance of domestic manufacturing capacity and job creation within India. Reducing reliance on external sources requires a robust and growing workforce.

Furthermore, the initial results of the ELI scheme have been promising, albeit cautiously optimistic. Data released by the Ministry of Labour and Employment indicates a modest but steady increase in net employment across participating sectors. The government views the scheme as a successful model and believes that a larger investment will yield even more substantial results. The 2026 budget is expected to include mechanisms for more rigorous monitoring and evaluation of the ELI scheme's impact, ensuring accountability and maximizing the return on investment.

Impact on Businesses and the Workforce

The expanded ELI scheme is expected to have a ripple effect throughout the economy. Businesses will be incentivized to invest in expansion and recruitment, leading to increased demand for skilled and unskilled labor. This, in turn, is anticipated to drive up wages and improve living standards. However, concerns remain about the potential for 'ghost' employees - companies falsely inflating their headcount to claim incentives. The government is reportedly implementing stricter verification processes and audit mechanisms to mitigate this risk.

The budget is also expected to outline provisions for skill development programs designed to equip the workforce with the necessary skills to meet the demands of the rapidly evolving job market. This includes collaborations between the government, private sector companies, and vocational training institutes. The focus will be on bridging the skills gap and ensuring that the workforce is prepared for the jobs of the future.

Beyond the Numbers: A Long-Term Strategy

The ELI scheme, and the anticipated budget boost, should not be viewed as a short-term fix, but rather as a core component of a longer-term strategy to transform India's economic landscape. The government hopes that by fostering a more vibrant and dynamic job market, it can unlock India's full economic potential and create a more inclusive and prosperous future for all its citizens. The increased funding demonstrates a commitment to proactive economic management, focused on building a resilient and sustainable economy that benefits all stakeholders.