Big outlays, small uptake: India's job schemes face a reality check

Despite large Budget allocations for PMIS and ELI, uptake remains low due to design issues, wage concerns and limited reach beyond big firms, prompting calls for a rethink

Drawing lessons from a closely contested general election in mid-2024, the Narendra Modi-led government framed the FY2024-25 Budget early the next year around employment and skilling. It unveiled initiatives such as the Prime Minister Internship Scheme (PMIS) and the Employment Linked Incentive (ELI) scheme to narrow the skill mismatch between labour supply and industry demand.

 

However, the schemes are yet to achieve the scale and success they were intended to.

 

The PMIS, under the aegis of the Ministry of Corporate Affairs (MCA), has identified various issues behind the lower acceptance of the scheme from the viewpoint of the applicants. The ministry has even drafted a proposal to run the scheme’s pilot with some tweaks to the age criteria and duration, among others. Policy experts feel that for such a scheme to achieve scale, it needs to look beyond the top 500 companies to a much larger universe of micro, small and medium enterprises (MSMEs), which cumulatively form the second-largest job-creating cohort in the country, second only to agriculture.

 

“Seventy per cent of the manufacturing sector growth in the last three years is in rural areas. These are small units, many doing sub-contractual work but they also need skill support. The schemes need to align themselves with the demands of such enterprises too,” said Amitabh Kundu, Distinguished Fellow at the Research and Information System for Developing Countries.

 

Experts point out that there is also a classic mismatch between supply and demand, based on what the employers want workers to do and what interns or apprentices want out of it.

 

“Apprentices are hired for longer periods than interns, but the applicants care about whether the role is prestigious, whether they will get absorbed as an employee and if the money offered is enough for survival,” Bornali Bhandari, professor at the National Council of Applied Economic Research (NCAER), pointed out.

 

The National Apprenticeship Promotion Scheme is currently being continued under its second phase, where the government shares partial stipend support, limited to 25 per cent of the minimum prescribed stipend payable to apprentices, subject to a maximum of Rs 15,000 per apprentice per month during the training period.

 

Highlighting the wage problem, Bhandari said that an apprentice could come prepared with skills but companies will still want to pay only Rs 15,000 as a starting salary.

 

The government’s ELI scheme or the PM Viksit Bharat Rozgar Yojana aims to incentivise the creation of more than 3.5 crore jobs across the country, with a total outlay of Rs 99,446 crore over a period of two years. Of this, its first outlay of Rs 20,082.7 crore was announced in the Union Budget 2026.

 

“For the ELI scheme, the way it is designed is a good idea but there are some systemic issues in it. Unless you make it easy for people, people will not avail such benefits. The macro picture also boils down to a lack of investment by private firms,” Bhandari said.

 

For PMIS, Budget 2026 saw an allocation of Rs 4,800 crore, much lower than the FY26 allocation of over Rs 10,000 crore. However, as of December 31, 2025, only Rs 64.91 crore of the FY26 allocation was utilised.

 

As of January 27, while 3,417 interns in the first round had completed the course, almost twice that number, or 7,094 candidates, left without completing the course, a Parliament response stated.

 

“This trend suggests that a substantial proportion of trainees either do not complete their training or are unable to convert their training into gainful employment, and also highlights the importance of understanding what’s holding people back, so we can help make skilling programmes more effective and truly impactful for those who need them,” said Binaifer Jehani, business head (Assessments), Crisil Intelligence.

 

The PMIS was announced in the Budget of July 2024, with the aim of providing internships to 10 million youth over five years across the top 500 companies. To that end, the ministry launched a pilot project on October 3 last year, with a target of 125,000 internships in a year.

 

“Largely the schemes are geared towards large companies and the scale needs to be widened beyond just that. There are structural norms and issues that need to be worked on. It might be better to first create examples of excellence and then show other institutes what is possible,” said Mekin Maheshwari, founder and chief executive officer of Udhyam Learning Foundation and Senior Ashoka Fellow.

 

Maheshwari pointed to successful examples of nurses’ training in India which have often led to lucrative jobs abroad. He said that India has not been able to replicate that success in training teachers, truck drivers or electricians. “The methods to train them have remained poor and not updated. We need an overall rethink and benchmark our initiatives to global skilling standards,” he noted.

 

The National Apprenticeship Promotion Scheme (NAPS), launched in 2016, was extended and revamped as NAPS 2.0 in April 2022 with a target of enrolling 46 lakh apprentices over a period of four years from FY2023 through FY2026. According to the NAPS dashboard, 4.9 million apprentices have been engaged, but only 7,18,034 have been certified, indicating the number of people who completed the training.

 

Besides developing the technical skills, experts feel there is also a need to focus on soft skills, which could have a large bearing on the outcome of such programmes.

 

“The ability to work as a team, communication, interpersonal relationships, the ability to handle diverse jobs, ability of multitasking — these are all supportive skills, which need to be a part of such training programmes,” said Abhay Tilak, director and secretary at the Indian School of Political Economy.