Internship scheme for youth: Govt starts discussions with industry

Officials said that the nitty gritty of the scheme will be prepared by the Ministry after the consultation process is over

The Ministry of Corporate Affairs (MCA) has commenced consultations with industry on an internship programme as part of corporate social responsibility (CSR) initiatives, following the Union Budget 2024-25 announcement, according to official sources.

So far, the ministry has engaged in discussions with 20 companies and is set to invite more companies from the list of the top 500 corporations for further consultations, the sources revealed.

Officials said that the detailed framework of the scheme will be formulated by the ministry after completing the consultation process.

Finance Minister Nirmala Sitharaman announced in the latest Union Budget that the central government would initiate a scheme offering internship opportunities to the youth within the top 500 companies. The MCA will collaborate with these companies to channel resources towards industrial skills training.

Under the scheme, interns will receive a monthly stipend of Rs 5,000, along with a one-time assistance of Rs 6,000. The cost of training these interns will be covered by the companies through their CSR activities. Participation in this scheme is voluntary for companies.

Internships will be facilitated through suppliers or value chain partners of the top 500 companies. Unlike apprenticeship programmes, companies will not be obligated to offer permanent positions to the interns.

The scheme's primary aim is to incentivise companies to engage individuals who might not otherwise be considered for employment without the subsidy.

The government will fund 90 per cent of the internship allowances, with companies contributing the remaining 10 per cent and absorbing the training costs internally.

Finance Secretary T V Somanathan recently highlighted that the scheme entails a substantial financial commitment, with projected costs estimated at Rs 60,000 crore.

Somanathan further explained that while the government is capable of establishing educational institutions and hiring educators for academic subjects, it faces challenges in delivering training tailored to specific industry-required skills. The new internship scheme, he explained, is designed to bridge the skills gap between education and industry demands.

In drafting the final scheme, the MCA plans to implement checks and balances to ensure transparency.

The Companies Act mandates corporate social responsibility as a statutory obligation in India, making it one of the few countries to enforce such a requirement. Globally, most nations adopt a voluntary approach to CSR spending, although countries like Norway and Sweden, which currently have voluntary CSR policies, initially began with mandatory provisions.

Data from the MCA shows an increase in CSR expenditure, from Rs 26,579.78 crore in 2021-22 to Rs 29,986.92 crore in 2022-23. The number of projects rose to 51,966 in 2022-23, up from 44,425 in the previous year.

Non-PSU (public sector undertaking) companies account for 84 per cent of the total CSR spending in the country.