Government of India is actively exploring the merger of Employment-Linked Incentive (ELI) scheme with PM Internship Scheme (PMIS) to create a more cohesive and impactful employment generation framework.
The proposed integration is expected to align internships with permanent job opportunities, offering wage subsidies and incentivizing companies to absorb trained interns into their workforce.
The move comes in response to tepid participation in the PMIS pilot phase and aims to enhance employability while streamlining government-backed employment initiatives.
Background: ELI Scheme and PM Internship Scheme Explained
ELI scheme, approved by the Union Cabinet on July 2, 2025, carries a budget outlay of ₹99,446 crore and targets the creation of 35 million jobs between August 2025 and July 2027.
Of these, 19.2 million beneficiaries are expected to be first-time employees.
The scheme offers:
- A wage subsidy of up to one month’s salary (maximum ₹15,000) for EPFO-registered first-time employees earning below ₹1 lakh/month
- An employer incentive of up to ₹3,000/month per additional employee hired above a baseline
Meanwhile, PM Internship Scheme, launched in October 2024, was designed to bridge the gap between academia and industry.
It provides:
- A monthly stipend of ₹5,000, split between corporate CSR contributions and government DBT
- A one-time joining grant of ₹6,000
- Internship opportunities in 500 top companies, with a goal of 1 crore internships over five years
Despite its ambitious goals, PMIS has struggled to gain traction.
The first round saw only 8,000 interns join companies—far below the 125,000 target for FY25. The second round is currently underway.
Merger Rationale: Boosting Efficacy and Participation
Officials from the Ministry of Corporate Affairs (MCA) and the Ministry of Labour and Employment have already held discussions on merging the two schemes.
The integration would allow companies that absorb interns post-training to receive additional benefits under the ELI scheme, thereby encouraging long-term employment commitments.
There are also talks to dovetail the National Apprenticeship Promotion Scheme (NAPS) and National Apprenticeship Training Scheme (NATS) into the ELI framework, creating a unified employment and skilling ecosystem.
Experts believe that merging PMIS with ELI could significantly improve participation, as interns would have greater visibility into permanent employment pathways, making the internship more attractive and purposeful.
Challenges and Tweaks Underway
To address low uptake, the government is considering a stipend hike under PMIS, potentially funded entirely through corporate CSR budgets.
A graded stipend structure is also being proposed to reward merit and attract skilled talent.
Other recent tweaks include:
- Geo-tagging internship opportunities to help candidates choose companies closer to their domiciles
- Enhanced transparency on the PMIS portal regarding food, accommodation, and location details
Despite these efforts, concerns remain about the scheme’s implementation and its ability to meet ambitious targets.
Critics have pointed to underutilized funds, high attrition, and lack of clarity in execution.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube, to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, Google News– Click Here, YouTube – Click Here, and LinkedIn– Click Here.
