Budget 2025: Internship scheme gets massive fund infusion, to see changes

Based on inputs from the pilot project, government is likely to introduce some tweaks to the programme to make it more viable for applicants and industry, besides raising awareness about the scheme

The Prime Minister Internship Scheme was announced in July 2024 in a Budget that followed an employment generation theme. In the latest Budget presented for financial year 2026, allocation for the programme is up almost 27 times, from Rs 380 crore as per the revised estimates for FY25 to Rs 10,831 crore in FY26.  

 

The jump suggests the scheme, in its current avatar, is still at the pilot stage but is expected to see a full-fledged launch in financial year 2026. However, some changes may be in the offing.  

 

In order for the scheme to attract more applicants, the government is considering changes based on the learning from the pilot programme, after which the Ministry of Corporate Affairs (MCA) will seek cabinet approval for the full-fledged roll-out of the scheme. 

 

“The first and the second phase of the scheme have been of immense learning for us. We are getting to understand the mind of this generation. Minor tweaks are being made to ease the process as we go along as well,” a senior official told Business Standard, on condition of anonymity.  

 

The MCA will also hold a meeting with representatives from industry and states soon to discuss the way forward for the scheme. 

 

The government aims to skill one crore youth in India’s top companies in five years through the internship scheme.  The youth will gain exposure for 12 months to real-life business environments, varied professions, and employment opportunities. 

 

Around 280 companies, said sources, are in the process of being onboarded to participate in the scheme and identify internship opportunities across districts.  

 

“We facilitated 82,833 internship opportunities from top 365 companies. The scheme has caught the attention of large multinationals as an appreciable initiative to enhance employability and impact the youth significantly," a spokesperson for the Confederation of Indian Industry (CII) said. “The scale of the programme brings in its own complexities but the industry is fully geared to making the scheme a success.” 

 

The Prime Minister Internship Scheme, in its first phase, saw around 1.81 lakh persons applying for 127,000 opportunities posted by companies. Acording to a reply to a Parliament Question on Tuesday, in the first phase partner companies made 82,077 internship offers to 60,866 candidates, out of which 28,141 candidates accepted offers to join the internship. The Parliament reply by the MCA also detailed that in first round, total one-time grant for incidentals amounting to Rs.4.38 crore has been sanctioned and paid directly into the Aadhaar Seeded Bank Accounts of the Interns who have joined so far.   Of these, only 80,000 were given the internship offer, according to sources. While roughly 30,000 applicants accepted, about 40,000 failed to make a firm decision. Sources said that while it has picked up in urban centres, it needs more awareness in rural areas. Many applicants have not availed the scheme even after applying and getting an offer for pursuing higher studies or because of location, among other issues.  

 

“In the first phase we have understood that location is very important. And many graduates are finding it difficult if the internship opportunity is 6-7 kilometres away,” another senior official said.  

 

More importantly, awareness of the concept of internship itself was found lacking in many segments. While graduates of commerce and business administration showed better responses to the scheme, awareness was lower in humanities graduates from smaller districts.  

 

Some changes are being implemented in the second phase of the pilot programme. The second round of the PM Internship Scheme Pilot Project has started from 9th January, 2025, and the companies are in the process of posting new as well as editing unfilled internship opportunities. For instance, unlike the first phase, applicants will now be able to see not just the internship opportunity but also the name of the company and the additional facilities that they will provide.  

 

Sources said that the government is considering widening the programme’s reach to make it more attractive. The scheme had set a target of providing 125,000 opportunities by the end of March 2025. 

 

A TeamLease survey released in January showed that 38 per cent of the companies flagged concerns around finding interns with the right skillset to match organisational needs. The study highlighted the need for targeted university programmes that match the demands of the industry. There is also some feedback that the current duration of a 12-month internship is too long and that there needs to be a more flexible option of three, six, or nine months.  

 

Industry participants have also made several suggestions to improve the scheme, such as preparing a 12-month training module to standardise the experience of the interns, adjusting stipends based on location and backgrounds of applicants to ensure fair financial assistance.  

 

“Existing partner companies need to restructure and realign their internship opportunities, incorporating necessary modifications, particularly in stipend support and increase in opportunities for graduates,” CII suggested. 

 

Top 500 companies based on their average Corporate Social Responsibility (CSR) spend for the last three years are also taking part in the scheme. Increasing the number of partner companies, experts feel, with a specific focus on Indian startups could create more opportunities. “Providing job placement support for interns who successfully complete their internship tenure within a company will tangibly increase the social impact of the program,” the CII spokesperson added.