IITs, IIMs, NITs, IIITs and other centrally funded institutions (CFIs) universities will receive their grants for expanding and building new infrastructure in form of loan through Higher Education Funding Agency (HEFA).
HEFA was set up by the government last year to mobilise funds from the market and offer 10-year loans to CFIs.
Earlier, the total grant to all the CFIs from the Government was around Rs 10,000 crore every year but under the new funding model – Revitalising Infrastructure and Systems in Education (RISE), the central universities and institutions will now be able borrow up to Rs 1,00,000 crore in the next four years.
A senior official of Ministry of Human Resource Development said, “In terms of funds availability, it is a 250% jump. The idea is to move away from lump sum grants to outcome-based approach and project-based funding. RISE will remove financial constraints imposed by budget availability and bring in greater accountability on part of the educational institutions.”
Loans borrowed by the institutions under RISE initiative can be paid back in 10 years. The loan repayments modes will vary from institutions to institutions based on their internal revenues. For instance, the central varsities will be granted loan in 90:10 window. It means that these universities will have to pitch in 10% of the actual principal amount to be repaid whereas the Government will repay the remaining amount and interest accrued on the loan to HEFA. On the other hand, IITs and IIMs may avail loans through the 75:25 window.
Union Finance Minister Arun Jaitley also announced to set up two new Schools of Planning and Architecture (SPA) in Guwahati and Pune this year and another 18 SPAs will also be established as autonomous Schools within IITs and NITs.