In a move to boost innovation, research and infrastructure at premier educational institutions, the Union Cabinet on Monday cleared the setting up of Higher Education Financing Agency (Hefa) to provid
In a move to boost innovation, research and infrastructure at premier educational institutions, the Union Cabinet on Monday cleared the setting up of Higher Education Financing Agency (Hefa) to provide funds up to Rs 20,000 crore for building research-oriented infrastructure at IITs, IIMs and other higher education institutes.
Union human resource development minister Prakash Javadekar said that the agency would be jointly promoted by an identified promoter and his ministry with an authorised capital of Rs 2,000 crore of which government equity would be Rs 1,000 crore.
The minister stated that Hefa will be formed as a Special Project Vehicle (SPV) with a PSU bank/government-owned Non-bank financial company 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.
Sources stated that the agency would also mobilise corporate social responsibility funds from PSUs and corporates for promoting research and innovation in these institutions on grant basis.
Hefa would finance the civil and lab infrastructure projects through a 10 year loan, a statement from the ministry said, adding that principal portion of the loan will be repaid through the “internal accruals” (earned through the fee receipts, research earnings etc.) of the institutions.
The government would service the interest portion through regular Plan assistance. For joining as a member, an institution should agree to open an Escrow account with a specific amount from their internal accruals with HEFA for a period of 10 years. The secured future flow from the account would be securitised by the HEFA for mobilising funds from the market. Officials said funds could also be raised using bond market by floating education bonds.
The HRD minister also said he is planning to introduce target-based bonuses and penalties for educational institutions as is done in the case of roads and highways. “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,” Mr Javadekar said.
