Budget 2024: PM Package Internship Scheme — Who Benefits, Who Doesn't

The full union budget presentation in July carries the recurring theme of employment, chiefly highlighted by the PM Package, a series of five schemes aimed at employment-linked incentives, skilling, and internship opportunities. The internship scheme, in particular, opens the door to the use of corporate social responsibility or CSR funds that are frequently unutilised by companies.

CSR, or corporate social responsibility, is a provision under the Companies Act, 2013, where companies are required to spend a minimum of 2% of their net profit over the preceding three years as CSR. The law also mentioned the computation of net profits for determining CSR under Section 198, which excludes capital payments and receipts, income tax, and the set-off of past losses. 

"As the fifth scheme under the Prime Minister's package, our government will launch a comprehensive scheme for providing internship opportunities to 1 crore youth in 500 top companies in five years," Union Finance Minister Nirmala Sitharaman said in her budget speech on Tuesday. "They will gain exposure for 12 months to the real-life business environment, varied professions, and employment opportunities."

"An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided. Companies will be expected to bear the training cost and 10% of the internship cost from their CSR funds."

Initial calculations estimate the cost to the exchequer at Rs 63,000 crore, with Rs 19,000 crore set aside for the first phase and Rs 44,000 crore for the second phase, which will come after training.

Phase I of the scheme has a 2 year enrollment period, and phase II has a 3 year enrollment period.

Candidates must apply through an online portal, and the scheme's design includes exclusionary criteria to better guide it. These include-

• The scheme is only for those who are not employed and are not engaged in full-time education.

• The age eligibility range is between 21 and 24 years old.

• Candidates with IIT, IIM, IISER, CA, CMA, and other professional qualifications would be ineligible.

• Candidates with any family member assessed for income tax would be excluded.

• Candidates who are family members of a government employee would not be eligible.

In terms of annual cost sharing, the division would be 90–10, with the government contributing Rs 54,000 towards a 'monthly allowance' and the company, on the other hand, contributing Rs 6,000 from their CSR funds towards the monthly allowance as per the scheme. The government has also allocated an additional Rs 6,000 grant for incidentals.

However, the company is responsible for paying the administrative and training costs.

Companies can offer internship opportunities voluntarily or through agreements with companies in their forward and backward supply chain, such as suppliers, customers, or other companies or institutions within their group.

Companies are also expected to provide the candidate with actual working experience on a skill in which the company is directly involved, where at least half the time should be in the actual working experience/job environment, not in the classroom.

The scheme also mentions coordination with state government initiatives wherever applicable.