India’s Newest Weapon Against Youth Unemployment:How Sharp Will Its Edge Be?

The Prime Minister Internship Scheme is a new policy launched by PM Narendra Modi aiming at securing internships for 1 crore (10 million) youth. India has been grappling with the problem of youth unemployment, with 10.2% of youth unemployed- able and willing to work, but unable to find any. This policy helps the youth gain skills necessary for employment that they may not have learnt in their formal education. This article seeks to examine the criteria of eligibility for these internships, it's possible benefits, and elaborate on the possible roadblocks to this policy that need to be addressed.

The following are the criteria for the scheme:

• This scheme is applicable only to Indian nationals between the ages 21-24.

• Full-time employees or students are ineligible for this scheme. 

• A minimum of a high school diploma is mandatory, and higher degree qualifications are accepted. However, graduates of top educational institutions (NLUs, IISER, NIDs, IIITs, and IITs) are excluded from this scheme. The same goes for people holding advanced certifications (a masters degree, CA, CMA, CS, MBBS, BDS, MBA, and PhD). 

• Those that are already beneficiaries of central or state government skill development programs are ineligible. 

• The recipients’ household cannot have any single member with an income greater than 8 lakhs per annum in FY 2023-24. 

• The recipient’s parent, husband or themself cannot be government employees of any kind (with the exception of contract employees) if they must be the recipient of this scheme.

•  The corporations offering these internships will be Indian and are chosen based on the top 500 Corporate Social Responsibility funders.

Before addressing the roadblocks to this policy, it is important to acknowledge the positive effect this policy can have. India’s youth unemployment has been at alarming numbers in the past, and despite some improvement in the last few years, the number is still quite high. A pivot of government schemes focusing not only on education, but also practical internships inculcates relevant skills in students and makes them much more employable- a problem universities across the country have failed to address. Until now, many unemployed youth spent their time in activities detrimental not only to themselves, but also society. Youth are often handed weapons and given the power to threaten people on behalf of politicians. This policy is a constructive use of national resources to free the youth from being a political tool by providing them employment: a constructive use of their time and resources.

Furthermore, the start to this policy has been extremely smooth. Already, 1.5 lakh (150,000) applicants are lined up. While this is solely 1.5% of the total goal, it is an impressive number, considering the scheme has just been launched. Unlike other policies, it has not been lost in layers of bureaucracy. As of now, the policy has been announced, applications have already closed. This policy is being implemented at a large scale in a rapid, efficient manner, which is rare to see and deserves appreciation. It is fair to say that the government will be looking to expand the number of internships in the coming years to achieve the 1 crore target. While it may be too early to be optimistic about the same, its current implementation does look promising.

This policy gives a grant to all those working in the internship. From a monthly pay of INR 5000, only INR 500 is funded by the selected corporations. While some might argue that this puts a massive strain on the government budget currently, it will be effective in the long term. Through successful internships, many of these candidates may get employed. The income they generate will be taxed. This is the fiscal multiplier effect, where fiscal investment of some amount leads to more benefits and revenue than the money invested into the project. Considering these interns are being paid a low amount for an important internship, alongside the people itself, it is the government that stands to benefit through a low-cost and high-revenue investment. Furthermore, there are low costs incurred to these corporations, who also secure a launchpad for new hires. Therefore, all major stakeholders benefit from this scheme.

This policy also addresses the concerns of multiple sections of society. Because the income requirements are towards the liberal side, it also benefits the middle class, especially the lower middle class, who have often expressed their concern of sidelining by the government, and hence their inclusion shows the potential of the range of impact this policy has. When pegged at a number, this includes the bottom 95% of the population. This policy, despite its seemingly exclusionary criteria, has a large impact. 

It is necessary to evaluate some roadblocks to implementation that may hinder the policy’s effectiveness. One drawback is that it prioritizes large corporations, considering it only evaluates the top 500 CSR contributors. In doing so, it neglects the MSME sector, which is an integral part of the labor force. Many would not end up working for these MSMEs post-internship, which they may be inexperienced with. India’s MSME market is growing and it needs skilled workers, which is another reason to prioritize it. Through limiting scope, it also negatively affects the interns’ chances at employment. Hence, it would be in the best interest of the policy to include MSMEs and other types of employers.

This policy also fails to address the unemployment rate spike as a result of the lockdown. People who got degrees at this point were more likely to be unemployed. These people would be a year above the policy limit on average. This would mean that this policy fails to benefit the people who have been affected by the pandemic the most. On the other hand, people who completed high school at that point would be eligible, unlike their more skilled degree-holding counterparts. Hence, special measures should be taken to include those who graduated, but suffered from unemployment due to the lockdown.

One aspect of employment that often remains undiscussed in India is underemployment. India has a significantly high underemployment rate. Since underemployed people hold jobs, they are ineligible for this scheme. They already have the skill to work a higher skilled job than they currently do. However, they are unable to do so because of neither acknowledgment of their underemployment, nor any social net for them to fall back on, unlike that of those who are unemployed.

Some parts of this policy are difficult to judge, as the policy is in the preliminary stage and not all of its constituent parts have been elaborated on, or can be measured. One of these questions is if diversity will be taken into account for these internships. The female unemployment rate often exceeds the male, and if not as many applications are received for women, will they still be allocated more internships? Will lower castes get any respite through this policy? It is also possible that only merit is taken into account. The second question is, why are families with government employees ignored? There is also the question of what the hiring rates will be with time. How many interns will truly get employed by the companies they intern for, and will this be but a one-time internship opportunity that translates into nothing for its beneficiaries?

To conclude, this scheme is undoubtedly the right step for the government to take. It promises to tackle many major issues in an efficient manner, as of the current scenario. However, while the policy itself is the right step, there are some challenges that need to be addressed and questions that need to be answered to ensure the scheme is rolled out smoothly and to its fullest capacity. Alongside these roadblocks, there are also some unanswered questions. All of these should be addressed as soon as possible, considering this scheme is soon to be under full swing.