Project-Based Learning (PBL) has emerged as a significant pedagogical approach in contemporary school education, particularly in the context of reforms that seek to move beyond rote memorization toward experiential, inquiry-driven, and competency-based learning. In India, the National Education Policy (NEP) 2020 and subsequent curriculum reform efforts have strongly advocated activity-based and experiential pedagogies, thereby creating a favorable policy environment for the adoption of PBL in schools. However, the translation of this vision into everyday classroom practice remains uneven, especially in government schools, where structural, pedagogical, and administrative challenges continue to shape teaching–learning processes. This paper examines the gap between the policy vision of Project-Based Learning and the ground reality of its implementation in Indian government schools. It aims to analyze how PBL is conceptually positioned within recent education reforms, how it is interpreted in school-level practice, and what barriers limit its authentic execution. The paper adopts a qualitative and analytical approach based on secondary sources, including policy documents, curriculum frameworks, implementation reports, and relevant academic literature. The study argues that while PBL is widely recognized for promoting student engagement, collaboration, critical thinking, and contextual understanding, its implementation in government schools is often reduced to superficial project work rather than genuine inquiry-based learning. Factors such as inadequate teacher training, large class sizes, pressure to complete the syllabus, exam-oriented assessment patterns, limited resources, and uneven institutional support contribute to this gap. The paper concludes that the challenge lies not in the pedagogical value of PBL itself, but in the absence of enabling conditions required for its meaningful implementation. It recommends context-sensitive teacher preparation, low-cost localized project design, better assessment integration, and stronger systemic support to bridge the divide between educational vision and classroom reality.