With the Cabinet approving the expansion of the capital base of the Higher Education Financing Agency (HEFA) to ₹10,000 crore – so that it can mobilise ₹1 lakh crore – funds for building research infrastructure, like labs, and academic infrastructure in higher education institutions is all set to move to HEFA.
The rationale: the HEFA process allows the channelling of finances for this purpose irrespective of the budget exercise.
“The idea is to be able to channel extra-budgetary support for these projects as and when needed. It is possible that requirements may shoot up sometime in the future but finances earmarked for education do not match them. In order to find a way out of this problem, we decided it can be raised from the market,” said an official.
HEFA proposes to mobilise funds from the market through government-guaranteed bonds and commercial borrowings.
Till now, projects worth ₹2016 crore for the IITs at Kanpur, Delhi, Madras (Chennai), Bombay (Mumbai) and Kharagpur have been approved by HEFA.
Funds for financing infrastructure for IIT Dharwad will be approved on July 20, said the official.
The redefined HEFA is more comprehensive than the original HEFA proposal on many fronts.
HEFA had been set up in 2017 to follow a specific process for financing educational infrastructure: an institution had to escrow a certain amount and access 10 times the funds, as per the project’s requirement, with the government servicing the interest and the institution repaying the principal amount.
However, this has been revamped, with many categories of institutions now required to repay much less or nothing.
Higher education institutions that came up after 2014 will get grants from the government for repaying the entire principal and interest. Similarly, all the new AIIMS and other health institutions, and Kendriya Vidyalayas and Navodaya Vidyalayas will also get grants for having the entire principal portion and interest serviced.
Central universities that were started before 2014 will have to repay just 10% of the principal amount from their resources and the rest will be paid by the government. Technical institutions that began between 2008 and 2014 will repay 25% of the principal portion from their resources and the government will take care of the rest.
However, technical institutions that are more than 10 years old will escrow an amount to get the loans and service the entire principal portion from their resources.
“Brain drain happens because our institutions don’t have quality research facilities, good supervisors and fellowships. With HEFA, the Prime Minister's Research Fellowships, etc., we are solving the problem,” said Minister of Human Resource Development Prakash Javadekar.
