Coming Soon! New Internship Scheme

'We are getting to understand the mind of this generation.'
'Minor tweaks are being made to ease the process as we go along.'

The first few months of its internship scheme have proved to be a learning experience for the government.

The Prime Minister Internship Scheme was launched on October 3 as a pilot project to equip India's youth with industry-relevant skills by offering training at top companies across sectors such as automotive, healthcare, banking, IT, aviation, and media - for a stipend.

However, only about one-third of the offers from India Inc have found takers, according to a statement in the Lok Sabha.

The ministry of corporate affairs (MCA), it is learnt, plans to hold discussions with industry and state representatives to refine the scheme and enhance its appeal to the youth.

The government's commitment to scaling up the initiative is reflected in the substantial budget increase, with Rs 10,831 crore (Rs 108.31 billion) allocated for FY26 -- five times the outlay of Rs 2,000 crore (Rs 20 billion) in FY25 and over 27 times than the Revised Estimates of Rs 380 crore (Rs 3.8 billion).

The indication is that the MCA will launch it as a full-fledged scheme in the next financial year after incorporating the lessons learnt until now.

Currently, the top 500 companies with the highest average corporate social responsibility (CSR) expenditure over the last three years are to be part of the scheme.

During the pilot's first phase, over 200 of these companies posted 127,000 internship opportunities, attracting 180,000 applications.

Ultimately, 82,077 offers were extended to 60,866 candidates, but only 28,141 accepted, according to a statement to the Lok Sabha. (Some applicants got more than one offer.)

"This period has been one of immense learning for us," says a senior official.

"We are getting to understand the mind of this generation. Minor tweaks are being made to ease the process as we go along."

The second phase, expected to be launched next week, will take on board another 280 companies and expand the internships to districts, an official says.

"We have understood that location is very important," adds another senior official, pointing out that many graduates found it difficult if the internship was far away.

Furthermore, some applicants declined offers to pursue higher studies instead.

Industry leaders have proposed several changes to improve participation.

Many believe the current 12-month internship duration is too long and suggest offering flexible options of three, six, or nine months.

The Confederation of Indian Industry recommends standardising the internship experience with a 12-month training module, adjusting stipends based on location and applicants' diverse backgrounds, and increasing financial assistance to interns.

In the present system, the candidates are able to browse internships based on their preferred sectors, roles and locations, and can apply for up to five opportunities.

The name of the companies or the additional facilities they may offer to the interns -- such as transportation and health benefits -- are not made known at the time of submitting the applications.

This is set to change in the second phase itself, officials say.

Awareness about internships, it was found, varies across educational backgrounds.

While commerce and business administration graduates responded well to the scheme, arts graduates from smaller districts showed lower awareness.

Also, the scheme has gained traction in urban areas, but rural outreach remains a challenge.

Experts believe increasing partner companies, particularly Indian startups, could generate more opportunities.

"Providing job placement support for interns who successfully complete their tenure within a company will significantly enhance the programme's social impact," a CII spokesperson says.

Expanding the scheme to include smaller enterprises would also strengthen India's employability pipeline.

One key challenge is stipend constraints.

Currently, companies can use only a portion of their CSR funds for intern stipends.

According to TeamLease Edtech CEO Shantanu Rooj, 34.43 per cent of surveyed companies want to allocate up to 20 per cent of their CSR budgets toward internships but require greater flexibility in fund utilisation.

The MCA will seek Cabinet approval for the full-fledged rollout of the scheme after incorporating lessons from the pilot phase.

Globally, internship programmes have proven to enhance workforce readiness.

For example, Infosys' InStep Global Internship provides real-world projects, mentorship, and cross-cultural exposure to improve employability.

"India must take inspiration from such structured models and strengthen industry-academia collaboration within the PM Internship Scheme to ensure students gain hands-on experience," Rooj suggests.

A January TeamLease survey found that 38 per cent of companies struggle to find interns with the right skill set, highlighting the need for university programmes that align with industry requirements.

A CII spokesperson says, "The scheme has gained attention from multinationals as a promising initiative to boost employability. While the programme's scale presents complexities, the industry is committed to making it successful."

The government aims to train 10 million youth in India's top companies over five years through the internship scheme.

Interns will gain exposure to real-world business environments and diverse employment opportunities.

Under the scheme, the MCA provides a direct benefit transfer of Rs 6,000 upon joining, along with coverage under the PM Jeevan Jyoti Bima and PM Suraksha Yojana.

Additionally, interns receive Rs 5,000 per month -- Rs 4,500 from the government and Rs 500 from the company's CSR funds, with companies allowed to provide further assistance from their own resources.

Eligibility criteria exclude certain professionals, such as chartered accountants, certified management accountants, and graduates from IITs or IIMs.

Applicants whose family income exceeds Rs 8 lakh for FY 2023-2024 or who have a government-employed family member are also ineligible.

The trial phase to create an industry-ready workforce through top-notch internships will end soon. The lessons could come in handy as the government goes full-throttle on the project.

Feature Presentation: Ashish Narsale/Rediff.com