Most internships are in name only. Most engineering students do 1 month internship at the end of third year. Also, 1 month is a very small time to learn any new thing practically. Thus, this internships are done only to enrich the CV of the student, which may come in handly during campus placements (during 4th year).
Also, internship in elite PSUs are in high demand compared to number of students applying. That is where recommendations come in. If you have any contacts within the PSU, then only your application will be considered.