The Union Budget 2024 has introduced a significant new internship scheme. This program aims to make one crore young people industry-ready. Each intern will receive a monthly stipend of ₹5000 from the government. Additionally, companies will provide an extra ₹6,000. This initiative encourages top companies to offer internships by providing them with incentives for five years. The government has set aside ₹19,000 crore for this scheme over five years.
Allowance and Duration
Interns will receive a monthly stipend of ₹5000 for a period of 12 months. Out of the total yearly stipend of ₹60,000, ₹54,000 is for the monthly allowance and ₹6,000 is for incidentals. Companies participating in this scheme must contribute ₹6,000 from their Corporate Social Responsibility (CSR) funds each month. The training and administrative costs will also be covered by the companies using their CSR funds.
Eligibility Criteria
The scheme is open to youth aged 21 to 24 who are not employed or engaged in full-time education. However individuals with qualifications from IIT, IIM, IISER, CA, and CMA are not eligible. Additionally applicants should not belong to families that pay income tax or have members employed by the government. Applications can be submitted through an online portal. Companies will select candidates based on objective criteria with a focus on those with lower employability.
Internship Structure
The scheme requires that at least half of the internship period be spent in an actual work environment. If a company cannot provide this, they must partner with other companies or institutions in their supply chain. This ensures that interns gain practical experience in relevant skills.
Expert Opinions
While the scheme aims to upskill one crore youth over five years, some experts have expressed concerns. The mandatory 12-month tenure for internships is considered too long by some. Emmanuel David, a mentor for the Executive Master of Science program at Columbia University believes that a year-long internship is similar to regular employment. He also noted that the stipend amount might not be attractive in the long run.
Partha Neogi co-founder and CEO of HRtech company Vantage Circle have revealed the importance of paid internships. He said that paid internships remove financial barriers which ensure that opportunities are based on merit. However Neogi also pointed out that the monthly stipend might be insufficient given the rising costs of daily expenses.
Why Are These Internships Important And How Will the Government Recover Their Funds?
These internships are very important for the government of India and for the people doing them. Firstly, this will give the students an exposure to the professional world which will allow them to gain workplace experience and allow them to learn the rules of the workplace. This experience will help them in getting future full-time jobs and experience is the key to get a job and a main requirement for the recruiters.
Secondly, it is good for the government as it will reduce the unemployment rate in the country and it will also aim to achieve economic growth. When the students will receive the stipend which they are likely to spend on them therefore this will increase the demand for the goods and services. As the demand for goods and services will increase the suppliers will increase their production and employ more people for it further reducing the unemployment.
Moreover, government tax revenue will also increase as the government will earn from corporate tax due to higher profits and the government will also earn from income tax due to higher employment. Therefore the government will cover their costs of providing this stipend through this.
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