Labour and Employment Secretary Vandana Gurnani has urged Global Capability Centres (GCCs) to actively participate in the Employment Linked Incentive (ELI) Scheme, highlighting its potential for job creation, especially for youth and women. Gurnani emphasized the substantive benefits available to both employers and employees under the ELI scheme.

Speaking at the GCC Business Summit organized by the Confederation of Indian Industry (CII) on Monday, Gurnani pointed out the significant scope for employment within GCCs and the simplicity of the ELI scheme's design and processes. She also mentioned the possibility of partnerships between GCCs and the government at both national and state levels.

The ELI Scheme: An Overview

The Employment Linked Incentive (ELI) Scheme is a government initiative designed to promote formal employment and boost job creation in the country. Launched as part of broader employment generation efforts, it provides financial support to employees and incentives to employers for hiring new workers. The scheme encourages companies to expand their workforce and bring more employees into the formal economy.

Key Features of the ELI Scheme:

• Incentivizes Job Creation: The ELI scheme encourages job creation by offering financial incentives to employers for hiring new workers.
• Boosts Formal Employment: The scheme aims to bring more workers into the formal sector, ensuring social security and better working conditions.
• Financial Support for Employees: Eligible employees benefit from government incentives.
• Strengthens the Workforce: By incentivizing recruitment, the scheme helps address unemployment issues.

Benefits for Employers:

• Reduced Hiring Costs: The ELI scheme can lower the cost of hiring for employers.
• Financial Support: The government covers a portion of the employer's contribution to the EPF account of new employees.

Benefits for Employees:

• Employees who are a first-time employee will receive a one-month salary in three installments, up to ₹15,000.
• Financial benefits: Eligible employees receive financial benefits as part of the government's effort to promote formal employment.
• Direct Benefit Transfer (DBT): Payments are directly transferred to the beneficiaries' bank accounts through the DBT system.

GCCs and India's Economic Growth

GCCs are increasingly recognized as substantial engines of growth and employment in India. Anuradha Thakur, Secretary of the Department of Economic Affairs, noted the need to study state-specific policies to further support GCCs, given that over 1,800 GCCs operate in India. She highlighted that GCCs contribute about 1.8% to the country's gross value added and are expanding beyond metropolitan areas into Tier 2 cities.

Sanjay Bahadur, Member (Income Tax) in the Central Board of Direct Taxes, acknowledged the rapid growth of GCCs and their potential for continued expansion over the next 5 to 10 years. He noted that GCCs contribute 2% of the GDP and employ approximately 30 to 35 million people.

India's Competitive Advantages

Several factors contribute to India's attractiveness for GCCs:

• Strong Infrastructure: India possesses robust physical and digital infrastructure.
• Strategic Interventions: Initiatives like Digital India streamline processes.
• Large Talent Pool: India boasts a large and diverse workforce.
• Evolving Regulatory Environment: India has a well-built regulatory environment.
• STEM Graduates: The country produces a large number of STEM (Science, Technology, Engineering, and Mathematics) graduates annually.
• Workforce Diversity: India has a diverse workforce with significant female participation.
• Demographic Advantage: India's young median age provides a fertile ground for continued GCC growth.
• Lower Manufacturing Costs: Manufacturing costs in India are significantly lower compared to the United States and Europe.

Labour Reforms and Future Growth

Gurnani also discussed ongoing labour reforms, including the implementation of Labour Codes and collaboration with state governments to advance these reforms. She outlined the expansion of career lounges in universities to serve as talent pipelines for the GCC sector and noted India's international agreements for workforce mobility. The central Government has begun formulating a comprehensive national framework for GCCs to enhance their growth and expand their base.