CSR list to be amended to aid big companies hire 10 million interns

The ministry of corporate affairs is set to amend the Corporate Social Responsibility (CSR) norms to enable big businesses to offer internships to a promised 10 million youngsters over five years, two persons informed about the development said.

The idea, proposed in the Union budget, is to allow part of the expenditure for internship programmes incurred by the top 500 companies as CSR spending.

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Since the funds earmarked for CSR by large companies are only a fraction of the net profit, the spending on internship will not affect computation of profits. Only those businesses with a net worth of ₹500 crore or more, sales of ₹1,000 crore or more, or a net profit of ₹5 crore or more are required to spend 2% of their average net profit of the preceding three years on charity.

The plan is to get the CSR regime to cover the cost of training and part of the internship cost by making legislative changes to Schedule seven of the Companies Act, which currently specifies 12 areas including eradicating hunger, promoting education, gender equality and sustainability as eligible CSR spending.

Work on amendments afoot

“Work on amending the CSR norms and setting up a portal dedicated to the internship programme is afoot. The scheme will be rolled out once all logistics arrangements are tied up," said one of the two persons quoted above.

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Prime Minister Narendra Modi is expected to launch the scheme, said both the persons quoted above. Queries emailed to the ministry of corporate affairs and to the Prime Minister’s Office on Thursday seeking comments for the story remained unanswered at the time of publishing.

Industry representatives said businesses are working with the government on the scheme. Industry plays a pivotal role in preparing the talent pool, said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII).

“The PM Internship Scheme with a target of 10 million youth is a transformational initiative that will enable corporates to leverage CSR funds for skilling talent and create a meaningful social impact. CII is closely working with the ministry of corporate affairs and facilitating the industry to plan and participate under this scheme and thus create a future-ready workforce for India," said Banerjee.

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The list of items eligible as CSR spending has been amended from time to time to mobilize corporate financing of projects of national priority.

For instance, contributions to the ‘Swachh Bharat Kosh,’ set up to mobilize resources for the ‘clean India’ drive as well as to the PM Cares Fund set up to offer emergency relief during the covid pandemic were included as eligible CSR spending by amending the seventh schedule of the Act.

Feasibility questioned

Critics question the feasibility of the scheme.

Amit Mitra, principal chief advisor to West Bengal Chief Minister Mamata Banerjee, told journalists last month that most of these 500 companies are undergoing capital intensive and technology induced changes and offering two million internships every year for five years was unrealistic.

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Mitra described the internship scheme as a “non-starter, knee-jerk and absolutely unacceptable", while arguing that taking steps to stimulate demand in the economy first will prompt a response from the industry—leading to investments and jobs.

The internship programme, one of five schemes announced by finance minister Nirmala Sitharaman in her FY25 budget in the area of employment, skilling and other opportunities for youth, has a government outlay of ₹63,000 crore.

The emphasis on employment and skilling in the first budget of the National Democratic Alliance's third term in office came in the wake of concerns over inadequate job creation in the world's most populous country in spite of strong economic growth—the ‘jobless growth' issue opposition parties raised during the national polls in May and June.