HEFA was set up on May 31, 2017, by the Centre for mobilising extra-budgetary resources for building crucial infrastructure in the higher educational institutions under it.
In a boost to higher education, the Cabinet on Wednesday allowed the Higher Education Financing Agency (HEFA) to borrow Rs 1 lakh crore from the market by 2022 to scale up funding of infrastructure development in higher educational institutions such as All India Institutes of Medical Sciences (AIIMS) and central universities. The modalities for raising funds via government guaranteed bonds and commercial borrowings would be decided in consultation with the department of economic affairs, the government said.
To enable HEFA to leverage equity to mobilise additional resources, its authorised share capital was raised to Rs 10,000 crore and approved infusion of additional government equity of rs 5,000 crore, over the Rs1,000 crore already provided.
HEFA was set up on May 31, 2017, by the Centre for mobilising extra-budgetary resources for building crucial infrastructure in the higher educational institutions under it. Under the existing arrangement, the entire principal portion is repaid by the institution over 10 years, and the interest portion is serviced by the Centre by providing additional grants to the institution.
The Cabinet also approved five windows for financing under HEFA and the modalities of repaying the principal portion of the fund while interest would be serviced by the government for all these cases.
Technical institutions that are more than 10 years old would have to repay the whole principal portion from the internally generated budgetary resources. Technical institutions started between 2008 and 2014 would repay 25% of the principal portion from internal resources, and receive a grant for the balance of the principal portion.
Similarly, central universities started prior to 2014 would repay 10% of the principal portion from internal resources and receive a grant for the balance of the principal portion. However, for newly established institutions started after 2014, grant would be provided for complete servicing of loan including the principal and interest on loans taken for construction of permanent campuses.
All the newly set up AIIMS and other health institutions, and the Kendriya Vidyalayas/Navodaya Vidyalayas would be funded and the ministries concerned will give a commitment for complete servicing of the principal and interest by ensuring adequate grants to the institution.
The measures on part-funding of infrastructure development in some higher educational institutions through user fees, etc, are part of the government’s endeavour to help institutions become self-sustainable and reduce fiscal burden.