With the backing of industry leaders and the government’s commitment to job creation, including internships in CSR spending could play a pivotal role in shaping the future of India’s workforce.
The New CSR Move Aimed at Boosting Employment Opportunities
NEW DELHI (India CSR): The Ministry of Corporate Affairs (MCA) is set to introduce an amendment to the Corporate Social Responsibility (CSR) norms to enable large corporations to offer internships to 10 million young individuals over the next five years. This move, which follows a proposal made in the Union budget, marks a significant step toward integrating internships into the CSR spending categories for India’s top 500 companies.
Expanding CSR to Include Internships
Corporate Social Responsibility (CSR) in India has long been a driving force behind corporate contributions toward social welfare projects. From promoting education to improving public health, companies have directed a portion of their profits to initiatives that benefit society at large. Now, the Indian government is preparing to amend the CSR framework once again to accommodate a growing demand for skilled employment by adding internship programs to the list of activities that qualify as CSR spending.
Under this new amendment, companies that fall within the eligibility criteria will be able to direct part of their CSR budgets to fund internships for young job-seekers, preparing them for future employment. This initiative comes at a critical time when concerns over job creation in India’s rapidly growing economy are high, and it is expected to have far-reaching implications for both businesses and young professionals.
Key Amendment: Allowing Internship Programs under CSR
The new proposal aims to allow big businesses to treat part of the expenditure on internship programs as eligible CSR spending. According to two sources familiar with the matter, this amendment is intended to incentivize companies to invest in youth training programs without affecting the computation of their profits. This is particularly important, given that CSR funds are a percentage of companies’ net profits over the previous three years, and therefore must be allocated strategically.
Only those businesses with a net worth of ₹500 crore or more, annual sales of Rs. 1,000 crore or more, or a net profit of ₹5 crore or more are required to spend at least 2% of their average profits from the previous three years on CSR activities. This eligibility criterion targets large corporations, which are well-positioned to create substantial internship opportunities and thereby contribute meaningfully to India’s workforce development.
Legislative Changes to Schedule Seven of Companies Act
The amendment will necessitate changes to Schedule Seven of the Companies Act, which currently lists 12 categories of activities eligible for CSR spending. These categories range from eradicating hunger to promoting gender equality, and from advancing education to supporting environmental sustainability. By including internships and skill development programs under CSR, the government seeks to bridge the gap between formal education and employment, ensuring that young professionals are better prepared to enter the workforce.
The plan is also aimed at reducing unemployment rates, particularly among India’s youth, by making it easier for companies to hire interns and provide them with the training necessary to thrive in a competitive job market.
Work on Amendments and Scheme Launch
Work on amending the CSR norms and establishing a dedicated portal for the internship program is already underway. Once the legislative and logistical arrangements are finalized, Prime Minister Narendra Modi is expected to formally launch the scheme. This will mark a significant milestone in the government’s efforts to mobilize corporate resources for projects of national priority, with a particular focus on employment and skill development.
Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII), has lauded the initiative, describing it as “transformational.” According to Banerjee, the PM Internship Scheme will enable corporations to leverage their CSR budgets for skilling talent, creating a “future-ready workforce” for India.
Past Amendments to the CSR List
This is not the first time the CSR list has been amended to address national priorities. In previous years, contributions to the Swachh Bharat Kosh (for the Clean India drive) and the PM Cares Fund (for COVID-19 emergency relief) were added to the list of eligible CSR spending. These amendments illustrate the flexibility of CSR regulations in adapting to emerging challenges and opportunities, and the inclusion of internships reflects the growing emphasis on employment generation in India.
Feasibility Concerns: Criticism of the Internship Scheme
Despite the ambitious scope of the internship scheme, critics have raised concerns about its feasibility. Amit Mitra, Principal Chief Advisor to West Bengal Chief Minister Mamata Banerjee, questioned the practicality of expecting large corporations to offer two million internships per year over the next five years. Mitra pointed out that many of these companies are undergoing significant technological and capital-intensive transformations, and argued that the internship scheme could be unrealistic given the current business environment.
Mitra described the scheme as a “non-starter,” calling for a greater focus on stimulating demand in the economy to encourage investment and job creation. His criticism highlights the challenges the government may face in ensuring that the scheme is fully implemented and delivers the desired outcomes.
Government’s Commitment to Employment and Skilling
The internship scheme is part of a broader set of initiatives announced in the FY25 Union Budget, which allocated ₹63,000 crore for employment, skilling, and youth opportunities. This renewed emphasis on job creation and skill development comes in response to concerns about India’s so-called “jobless growth”—an issue that opposition parties raised during the national elections earlier this year. Despite the country’s impressive economic growth, unemployment remains a significant concern, particularly in the face of rapid population expansion.
By integrating internships into the CSR framework, the government hopes to address these concerns and ensure that economic growth translates into tangible employment opportunities for India’s young workforce.
A Step Toward Workforce Development
The upcoming amendment to CSR norms, which will allow large corporations to fund internships, represents a bold step toward addressing India’s employment challenges. While the feasibility of the scheme remains a topic of debate, there is no doubt that it aligns with the government’s larger agenda of youth empowerment and workforce development.
As the MCA finalizes the necessary legislative changes, businesses will need to assess how best to incorporate internship programs into their CSR strategies. The success of this initiative will depend on the extent to which corporations can provide high-quality training and mentorship to young professionals, helping them develop the skills needed to succeed in a rapidly evolving job market.
(India CSR)
