Indiana has won federal permission to try a "two-years-and-you're-out" provision and other welfare reforms aimed at cutting the state's welfare rolls in half over seven years.

The reforms "will change welfare from a system that focuses on writing welfare checks to one that makes able-bodied people earn paychecks," said Gov. Evan Bayh, a Democrat.The reforms, if successful, would cut Indiana's welfare rolls from 70,000 to 33,000 in the next seven years and save the state more than $140 million by 2002, Bayh said.

For the current fiscal year, the state has allocated about $13.6 million for the Aid to Families with Dependent Children program, the nation's main welfare program. Washington provides the rest of the money.

Indiana's program is one of a half-dozen experiments in putting time limits on welfare. Other states conducting similar experiments include Colorado, Connecticut, Florida, Michigan, South Dakota, Vermont and Wisconsin.

Indiana's "is certainly one of the most aggressive and comprehensive that we've seen, and . . . is the largest," said Melissa Skolfield, a spokeswoman for the U.S. Department of Health and Human Services.

Indiana needed 42 waivers from Washington for the reforms to move forward.

Beginning Jan. 1, able-bodied adults on welfare will be enrolled in government-sponsored job training. After two years of job training, their welfare benefits will be cut off, regardless of whether they have found a job.

They must then wait three years before applying again for AFDC.

Also, mothers will no longer get an increase in benefits for any children born more than 10 months after they have been on welfare.

"We believe this is a social experiment that has the potential to be devastating to Indiana's poor children," said Jan Lindemann of the Indiana Coalition for Human Services.

Of the state's welfare recipients, up to 12,000 will take part in job training at any one time, with additional people joining as the first participants enter the work force.