Trade unions divided over the new employment linked incentive schemes

Labour ministry said that the ELI schemes have been designed to encourage businesses to generate more employment as well as to provide meaningful and sustainable jobs for the youth of the country

A meeting called by Union labour minister Mansukh Mandaviya to listen to the views of central trade unions on the recently announced employment linked incentive (ELI) schemes threw varied opinions with some criticising the new policy while others supported it.

Some unions demanded modification to the schemes to accommodate unorganised sector workers, along with placing mechanisms to ensure financial accountability, people present in the meeting told Business Standard.

“The employment subsidy of Rs 15,000 in three instalments to all new employees would only influence the compensation package offered by companies to internalise that subsidy. The other subsidy such as the Rs 3,000 a month contribution for two years to be made by the government against provident fund subscriptions, accrues directly to employers,” Amarjeet Kaur, general secretary, All India Trade Union Congress said.

Meanwhile, Deepak Jaiswal, president, National Front of Indian Trade Unions (NFITU) supported the schemes. He said that the schemes are a “positive” step towards employment creation and if need be, adequate regulatory mechanism should be developed so that the funds are utilised better and not “syphoned off”.

“While these are not ideal schemes, but we support them, primarily they are a step for the welfare of workers. Any amount of money that there will be, will ultimately go to workers. To avoid any misuse, the government should set up proper regulatory mechanisms,” Jaiswal advised. 

Tapan Sen, general secretary, Centre of Indian Trade Unions (CITU) said that the modality of [these] schemes appears to be such as to practically subsidise the labour cost of the corporations. 

“A similar scheme was launched earlier as well. Atmanribhar Bharat Rojgar Yojana (ABRY) post Covid only benefited the employers and its audit was never conducted to know of the real beneficiaries,” Sen added.

Another person present in the meeting, while requesting anonymity, said that these schemes are a form of subsidy to corporates, both domestic and foreign, being directly funded by national exchequer. 

Meanwhile, the labour ministry in a statement said that the ELI schemes have been designed to encourage businesses to generate more employment as well as to provide meaningful and sustainable jobs for the youth of the country. 

“During the meeting, [labour minister] stressed that the input of the trade unions is valuable to ensure that it serves the interests of all stakeholders,” it added.