The PM Internship Scheme (PMIS), announced in the FY25 Budget, is aimed at addressing the demand for a skilled workforce and reducing the large numbers of educated unemployed. There can be no denying the need for such a training scheme, given the scale of the issue at hand — low productivity of the existing workforce, poor skillsets of the 371 million youth (15-29 years) and the difficulties in making supply and demand ‘meet’ even where the skill sets exist, or can be raised with a bit of training. PMIS’ scope is ambitious, and rightly so. As a Standing Committee report of the Ministry of Corporate Affairs has noted, PMIS aims at providing internships to one crore youth over five years with an outlay of ₹63,000 crore (over ₹60,000 per candidate). PMIS has been conceived as a one-year skilling programme in PPP mode, with the Centre paying for 90 per cent of the monthly internship stipend of ₹5,000. While the company concerned will do the training, the Centre will screen the applications and match the candidates’ suitability with the needs of the enrolled companies. For the pilot scheme that is in process, 280 companies have enrolled.

The scheme has identified 500 top companies, based on their average CSR spends over the last three years. The pilot has received over six lakh applications for over a lakh internship posts in 280 corporates (one aspirant can apply for multiple internships). The Centre will electronically match the applications with the skill sets required by the companies concerned, besides crucially also prioritising socio-economic inclusiveness. After this round of screening, the companies concerned can — or rather, should ideally be able to — pick the interns as they deem fit.

The macroeconomic context for the scheme is stark. According to the ILO’s India Employment Report 2024, unemployment rate among youths in 2022 was six times greater for those who had completed secondary education or higher (18.4 per cent) and nine times higher for graduates (29.1 per cent) than for persons who could not read or write (3.4 per cent). The skew becomes worse when gender, rural-urban gap and caste are taken into account. If these companies are able to successfully train lakhs of youth through PMIS, it would lift labour productivity and reduce unemployment.

The Standing Committee makes some important observations to improve the scheme. While collaboration with the top 500 corporates is good for a start, engagement with SMEs and start-ups would help. The panel suggests systems to monitor post-internship outcomes. Industry bodies can be involved here so that all stakeholders benefit. But this should not translate into pressure tactics on companies to employ the interns. Nor should companies be forced to take as interns all those referred to them by the government. PMIS can work as a skills scheme, provided it does not bring back ‘inspector raj’ in the running of business. That would turn the clock back on over three decades of reforms.