Imagine Reena, a commerce graduate from a state university college in a tier-3 city in India. Her college does not have a placement cell, and despite her outstanding academic performance, her post-education options are limited to preparing for a government job exam, teaching in a nearby school (for which she may or may not have the aptitude), or getting married. At an aggregate level, one-third of India’s youth (aged 15-29 years) and more than half of its young women are not in education, employment, or training (https://tinyurl.com/yd675u5j). Further, a large section of India’s youth is too remote for a private company to hire. In this context, the recently launched PM Internship Scheme (PMIS) offers a market-led and youth-driven solution facilitated by the government’s commitment to youth empowerment.
The PMIS is designed to provide 12-month internship opportunities in top-500 companies to a specific group of youth. Those aged 21-24 years, from low-income households, and with educational qualifications ranging from matriculate to graduate (excluding IIT grads, CAs, etc.) are eligible. The scheme offers a monthly stipend of Rs 5000, funded jointly by the government (Rs 4500) and the company (Rs 500), with an additional Rs 6000 for incidentals. The pilot phase of the scheme aims to benefit 1.25 lakh youth in 2024, with a five-year target of facilitating internships for one crore youth. Companies can also use their CSR funds for expenditure under the scheme.
Internships have long been understood to be a mutually beneficial arrangement between young aspirants and employers. Education researchers and learning scientists have recognised the importance of work-based learning. Experiential learning approaches, pioneered by scholars including David Kolbs, John Dewey, Kurt Lewis, and others, have proved to be important instruments of workforce development in various international studies. Internships hone communication, collaboration, creativity and critical thinking.
For young aspirants, internships under the PMIS are not only opportunities but also transformative experiences. They provide exposure to the real world of corporate work, which is quite dissimilar from the relatively more structured and stable world of academics as taught in most colleges across the country. Besides developing and identifying their optimal career path, aspirants can also get hands-on training in handling responsibility, problem-solving, decision-making, teamwork, and time management. Internships also break many entry barriers that even talented, honest, and dedicated youth from small towns and villages struggle with, comprising soft skills such as speaking fluent English, email etiquette, using a computer, MS Office, or something as basic as searching the Internet for credible and most relevant information.
While internships are a norm in India’s premier institutions and professional courses, they remain unusual in state universities and less famous colleges attended by most youth due to a lack of career counselling and job-oriented networking. Mass-level internships through PMIS thus level the playing field for youth from non-metro cities and act as door openers for potential placements. At a personal level, the newfound financial freedom boosts confidence and motivates young minds to do better and aim higher. For young women, financial freedom and a sense of self-worth can alter life decisions, such as the age of marriage and pre-nuptial terms.
For the employer, internships are not just good low-cost experiments for testing a candidate’s suitability for long-term employment but also a strategic tool for bridging the skills gap and meeting its CSR mandate. Over 12 months, the company can credibly observe an intern’s IQ and EQ and confidently deploy the much-avowed strategy of “hire for attitude and train for skill”.
For the economy at large, PMIS is aligned with the National Education Policy 2020 and is a more immediate measure for promoting youth employment and bringing equity in employment prospects for youth from underprivileged backgrounds. By acting as a finishing school for young pass-outs, internships help reduce the economy’s deadweight loss of ‘talent sans employability’. Such a segue from education to employment would be all the more crucial in the coming age of AI, where job suitability would be determined by adaptability to change and life skills. In the long run, it could also influence the capital-to-labour ratio in the manufacturing sector.
That said, there remain challenges of physically accommodating large number of interns in companies, getting the top 500 companies to hire interns from tier-2 and tier-3 cities, and the adequacy of the monthly stipend in case an aspirant needs to shift out of her town. Here, remote work, hiring in non-metro offices and factories, and additional stipends by the company may be possible solutions.
The PMIS is thus a catalyst for employment creation, calling for widespread publicity and meticulous implementation, continuously aiming at a better fit with India’s demographic dividend. The high interest shown by corporates since the launch of the scheme augurs well for the success of the scheme’s goal of skilling Indian youth, boosting their employability and the ultimate aim of enhancing their livelihoods.
(V. Anantha Nageswaran is the Chief Economic Advisor to the Government of India. Deeksha Supyaal Bisht is an officer in the Indian Economic Service. Their views are personal. Courtesy: PIB)
