PM Internship Scheme Expands to Include MSMEs

The PM Internship Scheme has gained attention for its potential to enhance employment opportunities in India. Despite a positive response during its pilot phase, the scheme has struggled to meet its ambitious target of generating two million internships annually. The government is now considering including micro, small, and medium enterprises (MSMEs) to boost the number of internships created. This initiative is expected to be announced in the upcoming Union Budget for 2025-26.

Overview of the PM Internship Scheme

The PM Internship Scheme aims to provide internships to the youth across various sectors. It offers a monthly stipend of ₹5,000 to interns, with the government covering ₹4,500. Each intern also receives a one-time payment of ₹6,000 upon securing an internship. The scheme targets 10 million internships over five years in collaboration with the top 500 corporations involved in corporate social responsibility (CSR).

Current Challenges and Responses

As of January 2025, the scheme has managed to generate over 125,000 internship opportunities. This figure falls short of the two million target. The government faces criticism for not meeting employment generation goals. The inclusion of MSMEs is seen as a strategic move to leverage their capacity for providing internships.

The Role of MSMEs in Employment

MSMEs play important role in India’s economy, employing over 247 million people. They represent portion of the workforce. By integrating MSMEs into the internship scheme, the government aims to tap into their vast potential for providing training and practical experience to young job seekers.

Benefits of Including MSMEs

Incorporating MSMEs into the internship scheme could create a substantial increase in available internships. These enterprises often require skilled workers and can serve as training grounds for youth. This collaboration can also help MSMEs grow by providing them with a skilled workforce.

Future Prospects and Developments

The government is expected to announce changes to the PM Internship Scheme in the upcoming budget. These modifications may allow MSMEs to generate internship demand through their connections with larger corporations. The initiative aims to address job creation challenges and improve the employability of young people in India.

Government Initiatives for Employment Generation

The NDA government has made employment generation a priority in its recent budgets. The focus on skilling and internships reflects a broader strategy to combat unemployment. The government’s efforts align with the need to create more job opportunities in a rapidly evolving job market.

Statistics on MSMEs

As of 2025, there are over 58 million MSMEs registered on the Udyam portal. These enterprises employ more than 247 million individuals. In contrast, approximately 1.8 million companies are registered under the Companies Act. The majority of MSMEs operate in the services sector, with nearly 12 million involved in manufacturing.

Questions for UPSC:

1. Critically discuss the impact of MSMEs on India’s employment landscape.
2. Examine the potential benefits of government-funded internship schemes for youth employability.
3. Analyse the challenges faced by MSMEs in contributing to national employment goals.
4. Point out the significance of corporate social responsibility in encouraging job creation in India.

Answer Hints:

1. Critically discuss the impact of MSMEs on India’s employment landscape.

1. MSMEs employ over 247 million people, accounting for more than a third of India’s workforce.
2. They play important role in economic growth and job creation, particularly in rural areas.
3. MSMEs often provide flexible employment opportunities and help in skill development.
4. They contribute to innovation and entrepreneurship, encouraging a diverse job market.
5. Their integration into government schemes can enhance their capacity to provide internships and training.

2. Examine the potential benefits of government-funded internship schemes for youth employability.

1. Government-funded internships provide financial support, making opportunities accessible to a broader youth demographic.
2. Internships facilitate practical experience, enhancing skills and employability of young individuals.
3. They create a direct link between education and industry, improving job readiness.
4. Such schemes can help bridge the skill gap in the job market, aligning training with industry needs.
5. Increased internships can lead to higher employment rates and reduced youth unemployment.

3. Analyse the challenges faced by MSMEs in contributing to national employment goals.

1. MSMEs often struggle with high attrition rates, affecting their capacity to train and retain talent.
2. Limited access to funding and resources hampers their growth and ability to create jobs.
3. Regulatory hurdles and compliance costs can deter MSME expansion and job creation.
4. Many MSMEs lack awareness of government schemes that could support employment initiatives.
5. Competition from larger corporations can limit the market opportunities for MSMEs, affecting employment potential.

4. Point out the significance of corporate social responsibility in encouraging job creation in India.

1. CSR initiatives can drive investment in community development and skill-building programs.
2. Corporations can partner with MSMEs to create internship opportunities, enhancing job prospects.
3. CSR activities can promote sustainable business practices that contribute to long-term employment.
4. They can address social issues like unemployment by funding education and training initiatives.
5. Engagement in CSR encourages a positive corporate image and encourages other businesses to invest in job creation.