Higher Education Funding
Agency (HEFA) approves projects for Rs. 2,066.73 Cr to six higher education
institutions.
For providing additional funds for research and
related infrastructure, Higher Education Funding Agency (HEFA), has started its
operations. The HEFA Board had
held its 2nd meeting today and approved projects for Rs. 2,066.73 Cr
for six institutions – IITs Bombay, Delhi, Madras, Kharagpur, Kanpur and NIT
Suratkal. These funds would be used to improve the research
infrastructure in these institutions to further improve their standing at the
global level.
The HEFA Board approved
projects for Rs. 2,066.73 Cr for six institutions as per the details below:
|
|
Number of projects
|
Project cost
(Rs Cr)
|
% of total
|
|
Projects for Research/academic facilities
|
16
|
1028.73
|
50%
|
|
Projects for other supporting infrastructure
|
11
|
1038.00
|
50%
|
|
Total
|
27
|
2066.73
|
|
These institutions can
avail of these funds as per the progress of the project and complete them. The
funding under HEFA would be in addition to the grants being given to these
institutions.
Expressing happiness over the approval of
interest-free loans by HEFA Board, Union HRD Minister Shri Prakash Javadekar
said that today is a historic day for financing the needs
and promotion of research and innovation beyond budgetary allocations. The Union
Budget gives ample allocation and grants to Higher Education institutions but
still there is a greater need. The vision of Prime Minister Narendra Modi and
the resolve of Finance Minister Arun Jaitley has made possible the
operationalisation of HEFA to extend funds beyond budgetary allocations.
These funds are in addition to the grants that
Government gives to these institutions. As per the scheme, HEFA would mobilise
Rs. 20,000 Cr through market borrowing and would release the same to the
Government institution as interest- free loans.
HEFA was born out of the vision of Prime Minister Shri
Narendra Modi for providing additional finance for promoting research in the
higher educational institutions. The intent to create HEFA was made in
the Budget speech of 2016-17 which stated that, “We have decided to set up a
Higher Education Financing Agency (HEFA) with an initial capital base of
Rs.1,000 crores. The HEFA will be a not-for-profit organisation that will
leverage funds from the market and supplement them with donations and CSR
funds. These funds will be used to finance improvement in infrastructure in our
top institutions and will be serviced through internal accruals”. The Union Cabinet has
approved setting up HEFA on 12th September 2016.
Modalities of operation of HEFA
The HEFA is a novel method of funding the premier
institutions by using the instrument of ‘securitising the future flows’. Under
this, each institution agrees to escrow a specific amount from their internally
earned resources (not govt grants) to HEFA. This forms basis for a credit line
which can be used by the institution for creating the required capital and
research assets. The Principal portion is repaid from the escrowed amount and
the interest is met by Govt. For the institution, this is an interest-free
amount and gives facility to the institution to build the required research
infrastructure of world class.
Operationalising HEFA
The HEFA was registered as a Section – 8 Company under
the Companies Act on 31st May 2017. Canara Bank has been identified
as the partner for setting up the Company. Government has released Rs. 250 Cr
equity and the Canara Bank has given Rs. 50 Cr equity in the HEFA. RBI has
granted a license under the RBI Act for HEFA to operate as NBFC on 21st
November 2017 and to leverage the equity to mobilise money from market as per
the requirements of the institutions.
The Board has been constituted and held its first
meeting under the Chairmanship of Secretary Higher Education on 12th
June 2017.
Regards
Pralhad Jadhav
Senior Manager @ Knowledge
Repository
Khaitan & Co
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