Companies will now be required to use their CSR funds to cover 10 per cent of internship costs, as announced by Union Finance Minister Nirmala Sitharaman in her budget speech on July 23, 2024.
The initiative is aimed at creating opportunities for one crore youth in the top 500 companies over the next five years. As part of the scheme, interns will receive a monthly allowance of Rs 5,000 and a one-time assistance of Rs 6,000.
CSR in India is mandatory governed by Section 135 of the Companies Act, 2013, along with Schedule VII of the Act and the Companies (CSR Policy) Rules, 2014. These regulations define the criteria for CSR eligibility and set out requirements for implementing and reporting CSR activities.
According to the Section 135(1) of the Companies Act, 2013, and the Companies (CSR Policy) Rules, 2014, a company must comply with CSR provisions , if it meets any of the following criteria in the immediately preceding financial year:
– Net worth of Rs 500 crore or more,
– Turnover of Rs 1,000 crore or more, or
– Net profit of Rs 5 crore or more
Companies required to comply with CSR provisions must spend 2% of their average net profits from the previous three years on CSR activities, as stipulated by the CSR policy.
Importance of Internships
Internships are crucial for bridging the gap between academic knowledge and real-world applications. There are several companies that expect the candidates that apply for jobs to have some practical work experience. This expectation stands true even for freshers. While the freshers may not have experience of working on a professional level, they are required to understand the roles and responsibilities of the job thoroughly, which is impossible without having worked. Internships provide a platform to these individuals in gaining this experience.
It has been observed that freshers with internship experiences make more desirable candidates for jobs.
One of the biggest strength of India is its demographic dividend. India exports millions of people across the world to be part of global workforce. Such individuals, even with good education find it difficult to secure a job in other countries over a lack of work experience, and have to settle for low paying jobs. This often change or slow their career trajectory. This initiative will help in addressing this issue by improving the employability prospects of Indian youth, not just in India, but also across the globe.
