PM's internship scheme shows ambition, but demand tells a different story

When the Prime Minister Internship Scheme (PMIS) was announced in the Union Budget 2024-25, it was projected as an important step in India’s youth skilling strategy. The ambition was expansive: Provide internships to 10 million young people over five years by partnering the country’s top 500 companies, with a particular focus on the youth from Tier-II and -III cities. Two pilot programmes were rolled out, one late last year and another in August this year, to test the model before full-scale implementation. Early evidence, however, suggests that the scheme’s challenge is not a lack of company participation but a deeper mismatch between design and demand. The data placed before Parliament shows that candidates’ acceptance of internship offers fell 12.4 per cent between the first and second rounds of the pilot, even as the absolute number of offers rose and more than 70 new companies joined the programme. This decline is significant because it occurred despite greater outreach and refinements in the second round, including clearer job descriptions and better information on internship locations. In other words, awareness is improving but willingness to commit is weakening.

 

The reasons cited by the government are revealing. The Ministry of Corporate Affairs has acknowledged that the year-long duration of internships, limited alignment between candidates’ interests and the roles offered, and eligibility concerns, such as the age criterion, have affected participation. For many candidates, particularly from smaller towns, moving to other places, even if the distance involved is short, for modestly paid internships carries real opportunity costs. There is also an inherent tension in how the PMIS is positioned. While the scheme is framed as a programme on skilling and exposure, the government has repeatedly clarified that it is not designed to guarantee placements. Yet, in a labour market marked by high youth unemployment and underemployment, the absence of a credible employment pathway weakens the scheme’s appeal. The fact that companies may, at their discretion, offer jobs after assessing interns’ suitability does little to offset this uncertainty. The state-wise data from the pilot further underscores the uneven outcomes. While some states have seen high numbers of internship opportunities or offers, these have not consistently translated into a take-up. This divergence suggests that the bottleneck lies not in supply or initial interest but in the conversion of offers into meaningful participation, precisely the stage at which the design of a scheme matters most.

 

Perhaps the most telling indicator of the PMIS’s current limitations is the underutilisation of funds. Despite a substantial budgetary allocation for FY26, spending remains a fraction of what was earmarked. In 2024-25, the scheme was allocated ₹2,000 crore in the Budget estimates, and was changed to ₹380 crore in the revised estimates. Low utilisation reflects weak absorption on the ground and signals that the scheme, in its present form, is unable to scale up in line with its ambitions. None of this means the idea behind the PMIS is flawed. On the contrary, closer engagement between young people and formal enterprises is essential for bridging the gap between skills and jobs. But the pilot has made clear that scale cannot be a substitute for substance. Before committing itself to a nationwide rollout, the government must recalibrate the scheme, shortening internship tenures, improving role-skilling matching, prioritising local placements, and more clearly signalling employment outcomes.