The government’s flagship scheme for creating a skilled workforce – PM Internship Scheme (PMIS) – is witnessing a 20% dropout rate due to location constraints and longer duration of the internships, minister for state for corporate affairs Harsh Malhotra said on Monday.
In a reply to the Lok Sabha, the minister said that in two rounds of the pilot projects, 6,618 interns left their respective companies without completing the 12-month internships. This is significantly high considering that just about 33,300 interns had accepted the offers across two rounds.
What did Harsh Malhotra say?
Malhotra said that the ministry of corporate affairs (MCA) reached out to the stakeholders, including candidates, industry, industry associations and state governments, to evaluate the reasons for low acceptance. During the feedback process, candidates cited location as an important consideration with ideal travel distance indicated by candidates is between 5-10 km. Further, candidates said that the internship period of 12 months under PMIS is longer than the duration of normal skilling programmes. In some cases, candidates highlighted the lack of interest in the roles offered to them.
A high dropout rate under PMIS is despite the government tweaking the scheme to address the domicile issues. In the second round that started in January this year, the MCA asked the companies to give out exact internship locations, along with geo-tagging of the opportunities on the dedicated portal so that the applicants could apply for internships based on their location preferences. To plug the information gap about the roles being offered, the name of the companies and their profiles was made visible to the candidates.
Experts list low stipend as key issue
Even though the MCA has not highlighted the stipend issue, experts said that low stipend is one of the key reasons for high dropouts and low acceptance rates. Under PMIS, an intern is provided with Rs 5,000 per month of stipend over a 12-month period in addition to a one-time allowance of Rs 6,000. Cumulatively, the total acceptance rate stands at 20% in both rounds.
As such the scheme is witnessing a low acceptance rate. As against the 125,000 target set for FY25, just 33,000 candidates have been accepted by roles thus far.
The minister said that the FY25 budget had allocated Rs 2,000 crore to MCA for the PMIS, and Rs 840 crore was approved for the pilot project. For FY26, a sum of Rs 10,831 crore was allocated to the scheme. “Approximately Rs 73.72 crore has been utilised towards the pilot project of the PMIS as on September end,” he said.
Announced in the Budget 2024-25, PMIS aims to provide internship opportunities to 10 million people in top 500 companies over five years.