With less than six months left for this financial year and poor response from applicants, launching the scheme this year is unlikely.
The ministry of corporate affairs (MCA) is racing against time to roll out the Prime Minister Internship Scheme (PMIS) in the current financial year.
Even as officials are hopeful of the launch, sources said that a full fledged scheme may be introduced only next year.
"The launch should happen this year hopefully. Redesigning of the scheme is under process," a senior official said.
The MCA is currently focusing on the placements of the first batch of applicants who started their internships from December 1 onwards and the learnings would be incorporated, the official added.
The ministry is also working on fine tuning the guidelines of the scheme to make it more attractive to the youth.
This could include reducing the duration of internship from 12 months presently.
Without the timely launch, the MCA would have to surrender a chunk of its budget allocation for the PMIS.
With less than six months left for this financial year and poor response from applicants, launching the scheme this year is unlikely, sources said.
The revision in the guidelines is being considered ahead of the launch of the third pilot of the programme, sources said.
"The revised guidelines will keep in mind factors which can make the scheme more attractive to participants. These include qualification criteria which could be relaxed or the length of internship period," the source said.
The scheme was allocated Rs 2,000 crore in the Budget estimates (BE) for FY25, which was changed to Rs 380 crore in the revised estimates (RE).
The government allocated Rs 10,831 crore towards the scheme in FY26.
The MCA would have to apprise the finance ministry of the reasons for underutilisation of funds in the ongoing pre-Budget consultations with various ministries and departments.
Location considerations, duration of internship and pursuance of higher education, among others, are reasons for applicants not accepting the offer or not joining the internship.
This is according to the feedback received from various stakeholders, such as candidates, industry and associations and state governments.
With the pilot running since October 2024, the scheme aims to bring India's youth on a par with the skill sets the industry requires.
It intends to do so by providing year-long internships to 10 million youth in India's top 500 companies over five years.
In the first round, partner companies made over 82,000 internship offers to more than 60,000 candidates.
Of these, 28,000 accepted the offer, but eventually only 8,700 joined the internship.
A written reply in the Lok Sabha stated that in the second round of the pilot that started on January 9, 82,110 offers were made by companies and 24,131 were accepted as on August 12.
The Standing Committee on Finance -- in a report submitted to Parliament during the monsoon session -- had said that the PMIS needs to have periodic independent evaluations.
This is for transparency and relaxed eligibility norms for the marginalised and economically weaker candidates.
The report highlighted that without adequate support for living expenses, candidates from remote or underserved regions may be unable to participate.
This would hinder the programme's inclusivity and potential to attract a diverse pool of talent, the panel had said.
The MCA provides direct benefit transfer of Rs 6,000 to the intern on joining and a cover under the PM Jeevan Jyoti Bima and PM Surakha Yojana.
A financial assistance of Rs 5,000 per month is also provided to the intern. Of this, Rs 4,500 is disbursed by the government and Rs 500 is paid by the company from its corporate social responsibility (CSR) funds.
Companies can provide assistance over and above Rs 500 if they wish to do so from their own funds.
The internship scheme was announced by Finance Minister Nirmala Sitharaman as part of the government's job-push agenda in her Budget speech on July 23.
Feature Presentation: Ashish Narsale/Rediff