The Cabinet on Wednesday approved a proposal for expanding the scope of Higher Education Financing Agency (HEFA) by expanding its capital base to Rs 10,000 crore. The Centre also tasked the HEFA to mobilise Rs 1,00,000 crore for Revitalising Infrastructure and Systems in Higher Education (RISE) by 2022.
Chaired by Prime Minister Narendra Modi, the Cabinet Committee on Economic Affairs (CCEA) approved the proposal to expand this facility to all institutions, especially set up after 2014, Central Universities which have very little internal resources and the school education or health education infrastructure like AIIMS and Kendriya Vidyalayas.
The CCEA approved five windows for financing under HEFA and the modalities of repaying the principal portion of the fund (interest continues to be serviced through Government grants in all these cases).
HEFA was set up on May 31, 2017 by the Central Government as a non-profit, non Banking Financing Company (NBFC) for mobilising extra-budgetary resources for building crucial infrastructure in the higher educational institutions under the Central Government.
“Technical institutions which are more than 10-years-old will have to repay the whole principal portion from the internally-generated budgetary resources; institutions which started between 2008 and 2014 will repay 25 per cent of the principal portion from internal resources, and receive grant for the balance of the principal portion,” an official statement said.
“Central universities, which started prior to 2014, will have to repay 10 per cent of the principal portion from internal resources, and receive grant for the balance of the principal portion. Newly-established institutions will be provided grants for construction of permanent campuses,” it added.
Other educational institutions and grant-in-aid institutions of the Ministry of Health, including the newly-set up All India Institutes of Medical Sciences, and other health institutions, the Kendriya Vidyalayas and Navodaya Vidyalayas would be funded and the Department or Ministry concerned will give a commitment for complete servicing of the principal and interest by ensuring adequate grants to the institution.
The CCEA has also approved that the modalities for raising money from the market through Government guaranteed bonds and commercial borrowing would be decided in consultation with the Department of Economic Affairs so that the funds are mobilised at the least cost.