Union Cabinet approves HEFA to mobilise Rs 1 lakh crore for research and infrastructure development at institutions till 2022.
NEW DELHI: The Union Cabinet on Wednesday gave the Higher Education Funding Agency the green signal to mobilise Rs1 lakh crore for research and infrastructure development at institutions till 2022, in a move aimed at doing away with the grants-in-aid system.
So far, government institutions have been receiving a significant chunk of money as grants. With the setting up of the HEFA, institutions will have to send proposals on how they want to utilise the money, after which they will be given interest-free loans from the government through the funding agency.
The Modi regime had first announced the establishment of HEFA in the 2016-17 budget. It will leverage funds from the market and supplement them with donations and Corporate Social Responsibility funds.
The HEFA, which has been recognised as a non-banking financial institution by the Reserve Bank of India, will give interest-free loans to institutions, including central universities, technical institutions, IITs, NITs and medical colleges.
A new clause of letting the central government-run Kendriya Vidyalayas and Navodaya Vidyalayas to avail funds through the HEFA has been added.
“Increase of allocation for education from Rs 65,867 crore in 2013-14 to Rs 1,10,000 crore in 2018-19 (67 per cent increase) without any raise in fee is a huge push for research and academic infrastructure with social equity (sic),” HRD minister Prakash Javadekar tweeted following the Cabinet decision.
Calling the cabinet decision a landmark move, Javadekar said “the substantial allocation will help India compete on the world stage”.
According to government officials, the need for this change was felt after it emerged that some education institutions were not utilising funds properly.
“There was also a need to bring in private players in funding and building the higher education system so that the system can get a significant boost,” an HRD ministry official said. “Wherever there is a robust higher education system, it has survived because of the participation of public and private players. It was high time India moved to this system,” he said.
