Employment Linked Incentive (ELI) Scheme – A Step Towards Rights-Based Workforce in India
The article discusses the recently approved Employment Linked Incentive (ELI) Scheme by the Government of India as a transformative labour reform aimed at formalising the informal sector and ensuring dignified, rights-based employment in alignment with the vision of Viksit Bharat.
Key Highlights of the ELI Scheme:
- Formalisation with Rights:
The ELI scheme moves beyond payroll compliance to ensure access to:- Pensions
- Health and medical benefits
- Provident fund
- Legal recourse
- Pensions
- Lowering Entry Barriers:
The scheme lowers cost of recruitment for employers, encouraging hiring of:- Youth
- First-time job seekers
- Workers in healthcare, construction, and manufacturing
- Youth
- Focus on Empowerment and Equity:
Provides financial incentives of up to ₹15,000 per worker to new entrants, especially from vulnerable backgrounds.
Promotes women’s participation, decent work conditions, and shared growth. - Integration with Broader Reforms:
Complements existing skilling and internship schemes launched under National Apprenticeship Promotion Scheme (NAPS).
Aims to create employment in Tier-2 and Tier-3 cities by improving job pathways and access to social security. - Strengthening Industrial Relations:
Encourages trade unions to engage with newly formalised workers, raising awareness of their rights and boosting workplace democracy.
Enhancing Productivity & Industrial Peace:
Promotes trust-based employer-employee relations, leading to sustained employment, grievance redressal mechanisms, and cooperative dispute resolution.
Governance and Development Implications:
- The ELI Scheme reflects the government’s commitment to inclusive growth and sustainable development through rights-based labour market reforms.
- It aligns economic incentives with social security, improving ease of doing business and reducing informal sector vulnerabilities.
- A key step toward achieving productive employment and decent work for all, as envisioned in SDG 8.
- Background
- The Election Commission of India (ECI) has started the process to de-list 345 Registered Unrecognised Political Parties (RUPPs) that have not contested elections since 2019 and whose offices are untraceable.
- ✅Right to Form Associations
- Forming associations, including political parties, is a fundamental right under Article 19(1)(c) of the Constitution.
- ✅Registration Process
- As per Section 29A of the Representation of the People Act, 1951 (RP Act), a party must submit its constitution within 30 days, affirming commitment to democracy, secularism, and upholding sovereignty and unity.
- ✅Benefits to RUPPs
- Tax exemptions on donations.
- Common election symbol for contesting parties.
- Access to electoral rolls and media time during campaigns.
- ✅Compliance Obligations
- Must furnish donation details exceeding ₹20,000.
- Submit annual audited financial statements to maintain tax benefits.
- ✅Key Issue Identified
- Many RUPPs exist only on paper (‘letter pad parties’), misusing tax exemptions and not actively participating in elections.
- ✅Current Action by ECI
- Notices were issued to these parties; if no adequate response was received, they were delisted for non-existence.
- ✅Legal Limitation on De-registration
- As per the Supreme Court’s decision in Indian National Congress vs Institute of Social Welfare & Ors (2002), ECI lacks explicit power to de-register parties except in cases of fraud or constitutional disloyalty.
- ✅Law Commission Recommendations
- 255th report (2015): Suggested amending the RP Act to allow de-registration of parties not contesting elections for 10 years.
- Reforms in 2016: Proposed empowering ECI to regulate inactive parties.
- ✅Current Scenario
- Out of ~2,800 RUPPs (as of May 2025), only about 750 contested the 2024 general elections.
🗝️ Keywords Explained (For UPSC Mains)
- RUPPs (Registered Unrecognised Political Parties):
Political parties registered with ECI but not recognized as State or National parties due to not fulfilling performance criteria. - Section 29A, RP Act 1951:
Legal provision for registration of political parties, mandating them to follow constitutional values and submit periodic reports. - Article 19(1)(c):
Fundamental right guaranteeing freedom to form associations or unions, including political parties. - De-registration vs De-listing:
- De-registration: Complete legal cancellation of party status (currently, ECI lacks this explicit power).
- De-listing: Administrative removal from active records, often due to non-compliance.
- Letter pad parties:
Parties existing only on paper, used to avail tax benefits or launder funds. - Law Commission Report 255 (2015):
Suggested amendments to empower ECI to de-register inactive parties to strengthen electoral integrity. - Income Tax Act, 1961 (Section 13A):
Provides tax exemption to political parties on voluntary contributions, subject to compliance with reporting requirements. - Gati Shakti National Master Plan, Aspirational District Programme, etc. (contextually):
Examples of regional policy initiatives — though not directly mentioned, these illustrate how governance reforms intersect with party systems and regional representation.