ELI scheme: How industry experts are looking at the new internship policy

The government, in this year’s Union Budget, has focused on the new Employment-Linked Incentive Scheme under which it has listed a number of policies to increase the number of freshers in the workforce. However, what has created a buzz is the policy to facilitate internship opportunities for freshers across 500 Indian companies.

Interestingly, some Indian HR leaders and other industry experts have expressed concerns over this policy.

Under this policy, the government aims to upskill 1 crore youth over the next five years by exposing them to real time business environment. The tenure, as laid down by the government, for the internship mandatorily needs to be 12 months for the companies to receive stipend support of Rs. 5,000 for the intern.

Though the idea, as per the government, is to open up internship opportunities for students, the tenure and the stipend amount are causing discomfort to many. Business Today spoke with a former student of Arena Animation who did not want to be named. He said that 12 months is a long period of time for an internship. Generally, companies don’t hire interns for that long. But if this policy realises, employers may be encouraged to hire freshers as interns at a minimal cost. “This will not give out a positive message to the future workforce amid the rising cost of living.”

In alignment with this, Emmanuel David, former HR leader and Mentor for the Executive Master of Science programme at Columbia University Center for Technology Management said that it is a good way to show compassion and care for society, given the high unemployment rate in the country right now.

 But, according to him, the tenure is a little long as internships last for one to six months. “Engaging somebody for a year becomes regular employment and the stipend amount will not be very attractive. Though it looks good for the short term, it will not turn out well in the long run. So the internship period needs to be shorter and with more compensation,” he said.

Per the announcement by Finance Minister Nirmala Sitharaman, the government will only provide the monthly wage and a one-time aid of Rs. 6,000, while the rest of the cost is to be borne by the companies from the corporate social responsibility (CSR) fund.

Commenting on this, David further added that CSR is not a maturely programmed activity in many organisations. So guidance to the interns in their respective roles will be a big question. When such activities are involved, CSR also calls for commitment instead of just compliance.

According to the policy guidelines, companies need to provide the person an actual working experience on a skill in which the company is directly involved. At least half the time of the intern should be in spent in the actual workplace setting, and not in a classroom.

On this, HRtech company Vantage Circle’s cofounder and CEO Partha Neogi said, “Internships play a crucial role in shaping the future workforce and skill development. Paid internships eliminate the financial barriers that often deter talented individuals from participating, ensuring that opportunities are based on merit rather than financial capability.”

However, according to Neogi, the monthly allowance is matter of concern among students. “With the rising costs of daily expenses, including commuting, many might feel that INR 5000 shouldn’t be the maximum amount that an organisation pays to an intern.”