Union Cabinet Approves to set up Higher Education Financing Agency- HEFA for IITs, IIMs and NITs in India
The financing agency in India, Higher Education Financing Agency has approved by the Union Cabinet in its last meeting chaired by Prime Minister Modi. It would provide financial assistance to centrally aided institutes for promotion of world class infrastructure.
Details for Cabinet Approval to set up Higher Education Financing Agency:-
Following the Union Cabinet meeting chaired by PM Modi, the Central government had given a green signal for the establishment of Higher Education Financing Agency (HEFA) in an attempt to equip the premier institutions with high quality infrastructure. The financing agency would be promoted by HRD in conjunction with Non Banking Financial Company (NBFC).
Important Points to know about the HEFA:-
“The HEFA would be jointly promoted by the identified promoter and the Ministry of Human Resource Development (MHRD) with an authorized capital of Rs 2000 crore. The Government equity would be Rs 1000 crore,” said in an official statement.
- All centrally aided institutes for higher education in the country are eligible for membership after following specific norms in which the willing institutes had to escrow certain amount to HEFA as a bond
- The agency would function as a special purpose vehicle circumscribed under government owned BNFC or PSU Bank which would later increase the value of HEFA to Rs 20000 crore specified for the promotion of world class labs and infrastructure for centrally aided institutes including the IITs, IIMs and NITs.
- The institution can borrow capitals from HEFA for a period of 10 years
- The institute can repay the loan from its ‘internal accruals’ – the revenue collected from fees and research earnings
- The HEFA would finance specified amount to the institutes seeking for funds according to the weightage of the bond they had agreed to escrowed at the beginning
- The interest of loan would be serviced by the government under regular plan assistance
- Funds from Corporate Social Responsibility (CSR) could be given out on the basis of grants to various institutes only when mobilised by HEFA.
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