The Prime Minister’s Internship Scheme (PMIS), one of the Modi government’s flagship initiatives aimed at boosting youth skilling and employability, has faced a sharp funding cut in the FY27 Union Budget presented on Sunday. The scheme was allocated ₹4,799.96 crore for FY27, less than half of the over ₹10,000 crore earmarked for it in FY26, following unspent funds and a lukewarm response from candidates.
Revised estimates show that the corporate affairs ministry spent just ₹541.4 crore on PMIS in FY26, around 5% of the scheme’s budget, despite the scheme accounting for nearly 94% of the ministry’s total ₹11,561.19 crore allocation. For FY27, Mint analysis shows that 86.3% of the ministry’s budget has been set aside for the scheme.
Announced in the FY25 budget, PMIS aims to provide internships to 10 million candidates in the country’s top 500 companies over a five-year period. However, the scheme has struggled with participation: government data shared in Parliament in December 2025 revealed a dropout rate of over 40%.
Two pilot rounds were run by the ministry, with round 1 starting in October 2024 and round 2 in January 2025. Both rounds recorded low participation: only 16,060 of 52,779 candidates who accepted offers, about 30%, actually joined. Of these, 6,618 candidates (41.2%) dropped out before completing the internship. Round 1 saw a dropout rate of 52.1%, which fell to around 28% in round 2.
The government has attributed the poor response to factors including location constraints (candidates prefer internships within 5-10 km of home) and the longer 12-month tenure compared with other skilling programs. Experts have also flagged the ₹5,000 monthly stipend as insufficient, particularly for interns in tier-1 cities. For candidates relocating from smaller towns, moving costs often outweigh the earnings.
Youth unemployment in India is over three times higher than all-India average annual figure of 3.2%, according to data from the Periodic Labour Force Survey (PLFS).
