It is more toward Corporate & Social Respinsibity (CSR) as stated. Those companies who takes the interns want the undergraduates to complete their industrial training & to let them have the exposure of the working enviroment.

To pay or not pay ? I say pay for them to cover the meals & transportation. At the same time train them / let them face the real working pressure within the training period.

If you want our nation to progress, the whole industrial landscape need to be transformed. There are need to be have more collaborations between universities & industries, so that the tertiary education are producing the work force that our industries needed without having to retrain them.