‘Economic necessity & talent-building CSR tool’—Centre urges India Inc. to scale up PM Internship Scheme

The Ministry of Corporate Affairs urged large companies to treat apprenticeship programmes as both an economic necessity and a Corporate Social Responsibilit...

What Happened

The Ministry of Corporate Affairs urged large companies to treat apprenticeship programmes as both an economic necessity and a Corporate Social Responsibility (CSR) obligation, pushing India Inc. to significantly expand participation in national apprenticeship schemes.
The Ministry of Skill Development and Entrepreneurship (MSDE) set a target of engaging 46 lakh apprentices by March 2026 under the National Apprenticeship Promotion Scheme (NAPS-2).
The government formally recognised that CSR funds can be directed toward apprenticeship training — including basic training costs and stipend support — under Schedule VII of the Companies Act, 2013.
Officials cited low industry participation and gaps in stipend disbursement as key challenges hampering the apprenticeship ecosystem in India.
The PM Internship Scheme (PMIS) was also highlighted as a vehicle for corporate participation in talent building at scale.

Static Topic Bridges

The Apprentices Act, 1961

The Apprentices Act, 1961 is the central legislation governing apprenticeship training in India. It mandates that establishments in specified industries employing 30 or more workers must engage apprentices in designated trades, ranging from 2.5% to 15% of their total workforce (including contractual employees). The Act was significantly amended in 2014 to remove imprisonment as a penalty for non-compliance, replacing it with financial fines, and to expand the scope to include optional trades and graduate/diploma apprentices. Apprentices under the Act are classified as trainees, not workers, and labour laws do not apply to them during training.

Applicability: establishments with 30 or more workers across notified sectors
Stipend is mandatory and paid by the employer; Government of India reimburses 25% of prescribed stipend (up to ₹1,500/month per apprentice) under NAPS
2014 amendment: imprisonment removed; scope expanded to engineering graduates and diploma holders
Administered by the Directorate General of Training (DGT), Ministry of Skill Development and Entrepreneurship

Connection to this news: The Centre's push to scale up apprenticeships directly invokes employer obligations under the Apprentices Act, and frames corporate participation beyond mandatory quotas as a CSR opportunity.

Section 135 of the Companies Act, 2013 mandates that companies meeting specified thresholds must spend at least 2% of their average net profit of the preceding three financial years on CSR activities. The eligible activities are enumerated in Schedule VII of the Act, which includes skill development, employment-enhancing vocational skills, and livelihood projects. Apprenticeship training expenses — stipend and basic training costs — are explicitly eligible under Schedule VII item (ii) ("promoting education, employment-enhancing vocational skills"). This allows companies subject to the Apprentices Act to fund apprenticeship training through their CSR budget over and above their statutory quota.

Threshold triggers: net worth ≥ ₹500 crore, OR turnover ≥ ₹1,000 crore, OR net profit ≥ ₹5 crore (in preceding FY)
Mandatory 2% spend; unspent amounts must be transferred to a designated fund (PM CARES or similar) within 6 months of FY end
CSR Committee of the Board must formulate and monitor the CSR policy
Schedule VII activities include: education, health, environment, skill development, rural development, women empowerment

Connection to this news: By classifying apprenticeship training as CSR-eligible, the government provides companies a dual incentive — legal compliance with the Apprentices Act and utilisation of mandatory CSR funds, reducing net cost and administrative friction.

National Apprenticeship Promotion Scheme (NAPS)

NAPS was launched on 19 August 2016 by the Ministry of Skill Development and Entrepreneurship to provide financial support to employers undertaking apprenticeship training. NAPS-2 is the enhanced iteration targeting 46 lakh apprentices by March 2026. The scheme shares training costs with employers through two mechanisms: reimbursement of 25% of prescribed stipend (up to ₹1,500/month per apprentice) and reimbursement of basic training costs (up to ₹7,500 for 500 hours) for apprentices without prior formal training.

Launched: August 19, 2016
Administered by: Directorate General of Training (DGT)
Target under NAPS-2: 46 lakh apprentices by March 2026
Portal: Apprenticeship India portal (apprenticeshipindia.gov.in)

Connection to this news: NAPS-2's ambitious target of 46 lakh apprentices requires substantial private sector participation — precisely what the Ministry of Corporate Affairs is now advocating, framing it as both economic self-interest and CSR compliance.

Key Facts & Data

Establishments employing 30+ workers in notified industries must maintain apprentice-to-workforce ratio of 2.5%–15%
Government reimburses 25% of stipend (up to ₹1,500/month per apprentice) under NAPS
Basic training cost reimbursement: up to ₹7,500 for 500 hours (₹15/hour)
NAPS-2 target: 46 lakh apprentices by March 2026
CSR trigger: 2% of average net profit over preceding 3 financial years (Section 135, Companies Act 2013)
Schedule VII, item (ii) explicitly covers employment-enhancing vocational skills — eligible for CSR spending
Apprentices Act amended in 2014: imprisonment as penalty removed; fines remain