The Prime Minister Internship Scheme, announced in the Union Budget 2024-25, set out to plug a familiar gap in India’s skilling stack: weak exposure of young people—especially from Tier-II and Tier-III towns—to formal workplaces. The headline promise of the PM Internship Scheme was scale: 10 million internships over five years, through 500 large companies. It is still in pilot, and already being redesigned. Uptake has been weak, dropouts high, and spending far below what was budgeted.
Two pilot rounds were meant to test the model before a national rollout. For the pilot, ₹840 crore was approved; reported utilisation has remained a small fraction of that. Even as the scheme was provided for scaling in 2025-26, outlays have been ahead of ground absorption. That is not a bookkeeping quirk. It is a demand signal.
The pilot target—about 1.25 lakh internships—did not translate into sustained participation. Applications crossed two lakh across rounds and companies made tens of thousands of offers, but acceptances were modest and completions far lower. Those who joined often exited early. Policymakers are now redesigning the scheme because the pilot is not retaining participants.
READ I Menstrual health is enforceable right after Supreme Court ruling
Design problems of PM Internship Scheme
The problem is not a shortage of participating firms. It is the PM Internship Scheme’s design running into the constraints of its intended audience. Data placed before Parliament showed offer acceptance fell from 34% in the first pilot round to 29% in the second—a 12.4% decline—despite a larger pool of offers. The Ministry of Corporate Affairs has pointed to the one-year duration and a mismatch between candidates’ interests and roles on offer.
For candidates from smaller towns, a modest stipend is not “exposure”; it is a trade-off against foregone earnings and household constraints. PMIS offers a minimum stipend of ₹5,000 a month—₹4,500 from the Centre via DBT and ₹500 from the company—plus a one-time grant of ₹6,000. That arithmetic collides with rent, food and transport in most large urban centres. The pilot is making that collision visible.
Unsurprisingly, most candidates prefer postings within 5–10 km of their residence. This is not a lifestyle preference. It is feasibility in cities where commuting is slow, costly and unreliable. But the participating companies are not evenly distributed, and many internships require relocation or long commutes without housing or travel support. The scheme’s geography is working against it.
READ I Cooperative banks: RBI must fix structure, not issue licences
No placement guarantee
There is also a positioning problem. PM Internship Scheme is sold as skilling and workplace exposure, and the government has clarified it is not a placement guarantee. For a labour market with high youth unemployment and underemployment, a year-long internship with no credible pathway to employment is a hard sell. Some firms may hire after assessing interns, but that uncertainty is precisely what weakens demand.
The one-year duration compounds the problem. PMIS guidelines fixed the internship at 12 months, with at least half the time in a real work environment. That may suit employers, but it does not suit candidates under economic pressure or those trying to enter the labour market quickly. The government is now considering a shorter cycle and revised age rules because the original design misread demand.
None of this means the scheme is misconceived. The premise—that closer engagement between young people and formal enterprises is necessary to narrow the education-to-work gap—is sound. But scale does not substitute for viability. If the pilot cannot hold participants, the rollout will only multiply the weakness.
READ I India must regulate promoter power, not just retail volatility
Execution needs to be streamlined
Administrative execution of the PM Internship Scheme needs tightening as well, but with specificity. Matching breaks not in theory but in the sequence: candidates apply, firms make offers, candidates decline or do not join, and a share of those who join exit early. The policy question is not whether “the portal can be improved”. It is where the pipeline leaks—location mismatch, role mismatch, joining formalities, stipend timing, or weak on-the-job structure—and what the scheme does, quickly, when that leakage is detected.
Eligibility design matters too. If the age criterion is excluding the cohort the scheme aims to serve, adjusting it is not generosity; it is correction. But eligibility tweaks will not rescue a stipend that does not price in mobility.
International internship models work when they take those constraints seriously—through accommodation support, travel subsidies, or clearer hiring pipelines. PMIS does not have to become a placement scheme to build credibility. It has to make participation financially and logistically viable for the people it claims to target.
India’s employability problem is not new, and internship bridges can help if they are built for the people expected to cross them. PM Internship Scheme is among the largest attempts anywhere to institutionalise such a bridge. The early signal from the pilot is blunt: recalibrate the scheme now, before scale turns a design flaw into a national disappointment.