<p>The Narendra Modi government has finally revealed the pathetic performance card of the ‘1 crore internship’ scheme, announced with a lot of fanfare in <a href="https://www.deccanherald.com/union-budget-2024#:~:text=Budget%202024%20Recap&text=The%20Budget%20identified%20the%20following,%2C%20energy%20security%2C%20and%20infrastructure.">Budget 2024-2025</a>, as part of a still more ambitious Prime Minister Package on Employment (PMPE).</p><p><a href="https://www.msn.com/en-in/money/news/pm-internship-scheme-2025-over-28-000-students-secured-internships-till-now-second-phase-registration-begins/ar-AA1AnIdX">Only 28,141 interns accepted internship</a> offers during 2024-2025.</p><p>The government has been taking credit for ‘record-breaking’ job creation in India. The <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=2057970#:~:text=Periodic%20Labour%20Force%20Survey%20(PLFS,%2C%202023%20%E2%80%93%20June%2C%202024%5D&text=Labour%20Force%20Participation%20Rate%20(LFPR,78.8%25%20and%2041.7%25%20respectively.">Periodic Labour Force Survey (PLFS) for 2023-2024 (July-June)</a>, released in September, reported that 43.7 per cent (about 63.4 crore) of all-age persons had jobs in 2023-2024, growing from 34.7 per cent (about 47.2 crore) in 2017-2018.</p><p>If true, an increase of 16.2 crore jobs over six years is indeed spectacular!</p><p>The internship scheme did have a start, albeit pathetic. Three employment-linked incentive (ELI) schemes, aimed at creating over two crore jobs, announced in Budget 2024-2025, however, have not seen the light of the day, making the ELIs stillborn!</p><p>Why did the government announce big employment-creation schemes if the jobs growth was so good? Why did it make these announcements without adequate preparations? Is there a game in the PLFS employment numbers?</p>.R&D push could be a game changer.<p><strong>Employment schemes are failing</strong></p><p>Employment was the stand-out feature of Budget 2024-2025.</p><p>Three ELIs (A, B, and C) were aimed at generating 2.1 crore jobs and an internship scheme at helping one crore youth get an internship in the top 500 companies. The government committed expenditures of Rs 2 trillion to steamroll the schemes.</p><p>The ELI-A promised a one-month wage, limited to Rs 15,000, to eligible recruits, enrolled in <a href="https://deccanherald.quintype.com/story/a780c8be-513f-4e73-be8b-66c684184a66">the Employees Provident Fund Organisation (EPFO)</a> by their employers. The ELI-B sought to incentivise first-time recruitment in manufacturing jobs with the government paying the EPFO contribution for four years (24 per cent in first two, 16 per cent in third, and 8 per cent in fourth year). The ELI-C targeted employment in non-manufacturing sectors with the government paying up to Rs 3,000 per month for two years towards the EPFO contribution for each additional employee with incentives for employers creating more than 1,000 jobs.</p><p>Nothing, unfortunately, seems to have been done for formulating the ELIs. The question of their approval and roll-out, therefore, does not even arise. The Budget 2025-2026 speech made no mention of the ELIs. The action taken report (ATR) merely stated that draft Cabinet notes were under preparation. The budget provisions for 2024-2025 were also slashed.</p><p>The ELIs seem to have fizzled out and faded quietly into the background.</p><p><strong>A dramatic roll-out</strong></p><p>The internship scheme was entrusted to the Ministry of Corporate Affairs (with a Budget allocation of Rs 2,000 crore). The ministry created an IT platform for companies to list internships and interested candidates could apply.</p><p>The government found the response lukewarm. In December, ‘1 crore internship’ scheme was converted into a 1.25 lakh pilot project. About 1.27 lakh internships were offered and 6.21 lakh applications received. After matching and scrutiny, 82,077 offers were reportedly made; <a href="https://www.jagranjosh.com/current-affairs/pm-internship-scheme-2025-this-number-of-students-secured-internships-till-now-second-phase-registration-begins-1741266310-1#:~:text=According%20to%20a%20Ministry%20of,the%20internship%20program's%20first%20phase.">28,141 candidates accepted</a>.</p><p>There is no information on how many candidates joined and are undergoing internships, and in which companies. The government has opened another round of listing and applications, with March 12 as the last date.</p><p>Its prospects, however, look bleak. The scheme seems to have become deadwood.</p><p><strong>PLFS romped up jobs number</strong></p><p>According to the PLFS, the unemployment rate went down from 6.1 per cent in 2017-2018 to 3.2 per cent in 2023-2024. A 3 per cent unemployment rate indicates hardly any unemployment. India seemed to have achieved jobs nirvana!</p><p>There are, however, two big loopholes.</p><p>First, employment in agriculture, already uncomfortably high at 44.1 per cent in 2017-2018 (20.8 crore) has gone up further to 46.1 per cent in 2023-2024 (29.2 crore). Additionally, employment of 8.4 crore persons in agriculture only hides and aggravates existing massive hidden underemployment.</p><p>Second, ‘unpaid labour in household enterprises’ workers (earn no wages, and it is wrong to categorise them as employed), part of self-employment jobs, increased from 13.6 per cent in 2017-2018 (6.4 crore) to 19.4 per cent in 2023-2024 (12.3 crore) contributing the creation of another 5.9 crore jobs.</p><p>These two shady additions (14.3 crore in all) make almost the entire increase of 16.2 crore in jobs between 2017-2018 and 2023-2024 largely suspicious.</p><p><strong>Decline in real wages</strong></p><p>The purpose of employment is to earn wages. Fake increase in employment brings down average wages. PLFS data itself reveals this. The Economic Survey 2024-2025 also underlines the same (in graph XII, pages 378-379).</p><p>Of India’s three classes of workers, real earnings of regular wages/salaried workers reduced from Rs 12,665/month in 2017-2018 to Rs 11,858/month in 2023-2024 (by 6.4 per cent) for males and, from Rs 10,116/month to Rs 8,855/month (by 12.5 per cent) for females.</p><p>In case of self-employed workers (which include unpaid labour in household enterprises), the real wages in this period declined from Rs 9,454/month to Rs 8,591/month for males (9.1 per cent) and from Rs 4,348/month to Rs 2,950/month for females (32.5 per cent). For female self-employed workers, even nominal earnings declined from Rs 5,935/month to Rs 5,497/month.</p><p>Such drastic reduction in real wages mirrors the inverse image of puffed-up employment growth, and, thus, explains the conundrum.</p><p><strong>Ignore job crisis only at your peril</strong></p><p>Thanks to automation and artificial intelligence, risk to jobs is massively increasing everywhere. The PLFS, the ELIs, and the Internship schemes may boost job statistics but provide no real jobs.</p><p>India requires the right solutions for expanding real employment opportunities, back-stopped by a functional basic income scheme for the unemployed and under-employed.</p><p><em>Subhash Chandra Garg is former Finance & Economic Affairs Secretary, and author of ‘The Ten Trillion Dream Dented’, Commentary on Budget 2024-25 and ‘We Also Make Policy’.</em></p>.<p><em>(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH).</em></p>
<p>The Narendra Modi government has finally revealed the pathetic performance card of the ‘1 crore internship’ scheme, announced with a lot of fanfare in <a href="https://www.deccanherald.com/union-budget-2024#:~:text=Budget%202024%20Recap&text=The%20Budget%20identified%20the%20following,%2C%20energy%20security%2C%20and%20infrastructure.">Budget 2024-2025</a>, as part of a still more ambitious Prime Minister Package on Employment (PMPE).</p><p><a href="https://www.msn.com/en-in/money/news/pm-internship-scheme-2025-over-28-000-students-secured-internships-till-now-second-phase-registration-begins/ar-AA1AnIdX">Only 28,141 interns accepted internship</a> offers during 2024-2025.</p><p>The government has been taking credit for ‘record-breaking’ job creation in India. The <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=2057970#:~:text=Periodic%20Labour%20Force%20Survey%20(PLFS,%2C%202023%20%E2%80%93%20June%2C%202024%5D&text=Labour%20Force%20Participation%20Rate%20(LFPR,78.8%25%20and%2041.7%25%20respectively.">Periodic Labour Force Survey (PLFS) for 2023-2024 (July-June)</a>, released in September, reported that 43.7 per cent (about 63.4 crore) of all-age persons had jobs in 2023-2024, growing from 34.7 per cent (about 47.2 crore) in 2017-2018.</p><p>If true, an increase of 16.2 crore jobs over six years is indeed spectacular!</p><p>The internship scheme did have a start, albeit pathetic. Three employment-linked incentive (ELI) schemes, aimed at creating over two crore jobs, announced in Budget 2024-2025, however, have not seen the light of the day, making the ELIs stillborn!</p><p>Why did the government announce big employment-creation schemes if the jobs growth was so good? Why did it make these announcements without adequate preparations? Is there a game in the PLFS employment numbers?</p>.R&D push could be a game changer.<p><strong>Employment schemes are failing</strong></p><p>Employment was the stand-out feature of Budget 2024-2025.</p><p>Three ELIs (A, B, and C) were aimed at generating 2.1 crore jobs and an internship scheme at helping one crore youth get an internship in the top 500 companies. The government committed expenditures of Rs 2 trillion to steamroll the schemes.</p><p>The ELI-A promised a one-month wage, limited to Rs 15,000, to eligible recruits, enrolled in <a href="https://deccanherald.quintype.com/story/a780c8be-513f-4e73-be8b-66c684184a66">the Employees Provident Fund Organisation (EPFO)</a> by their employers. The ELI-B sought to incentivise first-time recruitment in manufacturing jobs with the government paying the EPFO contribution for four years (24 per cent in first two, 16 per cent in third, and 8 per cent in fourth year). The ELI-C targeted employment in non-manufacturing sectors with the government paying up to Rs 3,000 per month for two years towards the EPFO contribution for each additional employee with incentives for employers creating more than 1,000 jobs.</p><p>Nothing, unfortunately, seems to have been done for formulating the ELIs. The question of their approval and roll-out, therefore, does not even arise. The Budget 2025-2026 speech made no mention of the ELIs. The action taken report (ATR) merely stated that draft Cabinet notes were under preparation. The budget provisions for 2024-2025 were also slashed.</p><p>The ELIs seem to have fizzled out and faded quietly into the background.</p><p><strong>A dramatic roll-out</strong></p><p>The internship scheme was entrusted to the Ministry of Corporate Affairs (with a Budget allocation of Rs 2,000 crore). The ministry created an IT platform for companies to list internships and interested candidates could apply.</p><p>The government found the response lukewarm. In December, ‘1 crore internship’ scheme was converted into a 1.25 lakh pilot project. About 1.27 lakh internships were offered and 6.21 lakh applications received. After matching and scrutiny, 82,077 offers were reportedly made; <a href="https://www.jagranjosh.com/current-affairs/pm-internship-scheme-2025-this-number-of-students-secured-internships-till-now-second-phase-registration-begins-1741266310-1#:~:text=According%20to%20a%20Ministry%20of,the%20internship%20program's%20first%20phase.">28,141 candidates accepted</a>.</p><p>There is no information on how many candidates joined and are undergoing internships, and in which companies. The government has opened another round of listing and applications, with March 12 as the last date.</p><p>Its prospects, however, look bleak. The scheme seems to have become deadwood.</p><p><strong>PLFS romped up jobs number</strong></p><p>According to the PLFS, the unemployment rate went down from 6.1 per cent in 2017-2018 to 3.2 per cent in 2023-2024. A 3 per cent unemployment rate indicates hardly any unemployment. India seemed to have achieved jobs nirvana!</p><p>There are, however, two big loopholes.</p><p>First, employment in agriculture, already uncomfortably high at 44.1 per cent in 2017-2018 (20.8 crore) has gone up further to 46.1 per cent in 2023-2024 (29.2 crore). Additionally, employment of 8.4 crore persons in agriculture only hides and aggravates existing massive hidden underemployment.</p><p>Second, ‘unpaid labour in household enterprises’ workers (earn no wages, and it is wrong to categorise them as employed), part of self-employment jobs, increased from 13.6 per cent in 2017-2018 (6.4 crore) to 19.4 per cent in 2023-2024 (12.3 crore) contributing the creation of another 5.9 crore jobs.</p><p>These two shady additions (14.3 crore in all) make almost the entire increase of 16.2 crore in jobs between 2017-2018 and 2023-2024 largely suspicious.</p><p><strong>Decline in real wages</strong></p><p>The purpose of employment is to earn wages. Fake increase in employment brings down average wages. PLFS data itself reveals this. The Economic Survey 2024-2025 also underlines the same (in graph XII, pages 378-379).</p><p>Of India’s three classes of workers, real earnings of regular wages/salaried workers reduced from Rs 12,665/month in 2017-2018 to Rs 11,858/month in 2023-2024 (by 6.4 per cent) for males and, from Rs 10,116/month to Rs 8,855/month (by 12.5 per cent) for females.</p><p>In case of self-employed workers (which include unpaid labour in household enterprises), the real wages in this period declined from Rs 9,454/month to Rs 8,591/month for males (9.1 per cent) and from Rs 4,348/month to Rs 2,950/month for females (32.5 per cent). For female self-employed workers, even nominal earnings declined from Rs 5,935/month to Rs 5,497/month.</p><p>Such drastic reduction in real wages mirrors the inverse image of puffed-up employment growth, and, thus, explains the conundrum.</p><p><strong>Ignore job crisis only at your peril</strong></p><p>Thanks to automation and artificial intelligence, risk to jobs is massively increasing everywhere. The PLFS, the ELIs, and the Internship schemes may boost job statistics but provide no real jobs.</p><p>India requires the right solutions for expanding real employment opportunities, back-stopped by a functional basic income scheme for the unemployed and under-employed.</p><p><em>Subhash Chandra Garg is former Finance & Economic Affairs Secretary, and author of ‘The Ten Trillion Dream Dented’, Commentary on Budget 2024-25 and ‘We Also Make Policy’.</em></p>.<p><em>(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH).</em></p>
