The higher education of the country has been attracting ire of educationists, academics, social workers and eminent personalities from different strata of society. India’s poor performance in world university ranking, whether it be by QS or times has been abysmally poor. Most of the time the blame is led upon the issues such as lack of infrastructure and funding.
However, this may all end for good in near future. The central government has come up with a proposal to invest up to Rs. 2000 crore in form of funds to IITs, IIMs and other centers of higher education for building infrastructure which would contribute towards innovation and research.
The proposal in this regard, forwarded by the Human Resource Development (HRD) ministry has already been cleared by the Union cabinet chaired by the Prime Minister Narendra Modi.
Commenting on the decision, the minister of HRD Prakash Javadekar said that, “a Higher Education Financing Agency (HEFA) would be jointly promoted by an identified promoter and his ministry with an authorized capital of Rs 2,000 crore of which government equity would be Rs 1,000 crore.”
According to the HRD minister, “the HEFA would be formed with a Special Project Vehicle (SPV) with a PSU Bank/Government-owned NBFC as promoter and it would leverage the equity to raise up to Rs 20,000 crore for funding infrastructure projects and development of world class laboratories in institutions like IITs, IIMs and NITs etc.”
In a statement added by the ministry in this regard, it was said that mobilise Corporate Social Responsibility (CSR) funds from PSUs and Corporates, which would be released for promoting research and innovation in these institutions on grant basis.”
The HRD minister further added that, “If a project is completed before time, we will provide a bonus and if it is not completed as per schedule, there can be a penalty for the entity concerned.”
According to the reports by the ministry, any member institution of the part of funding program would be eligible for a credit limit for a credit limit which would be decided by accessing the amount agreed to be escrowed from the internal accruals.
As eligibility criteria, the member institution must open an escrow account with specific amount from their internal accrual with HEFA for a period of 10 years. HEFA, on its part, would secure the future flow from the account for mobilizing funds from the market.
The officials from the ministry also added that funds could be raised using bond market by floating education bonds.