Amader Bharat Desk, November 29, New Delhi: On the approval of interest-free loans by Higher Education Funding Agency (Board, Union HRD Minister Shri Prakash Javadekar said “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 operationalization of HEFA to extend funds beyond budgetary allocations.
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. These funds are in addition to the grants that Government gives to these institutions. As per the scheme, HEFA would mobilize 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.1K crores. The HEFA will be a not-for-profit organization 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 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 mobilize money from market as per the requirements of the institutions.