Govt may turn to firms to fund higher education
A plan has been drafted by the ministry of human resource development and will be presented before the Union cabinet for consideration
New Delhi: The Union government is looking to rope in companies and high net-worth individuals (HNIs) to finance and promote higher education in India.
The move, experts feel, could set the tone for structured private participation in building education infrastructure in the country.
A plan has been drafted by the ministry of human resource development and will be presented before the Union cabinet for consideration. It would be implemented through the higher education funding agency (HEFA), an NBFC under the ministry, said two government officials.
“HEFA would require contributions in the form of equity and other debt instruments so that it can mobilise up to ₹1 lakh crore from the market for funding infrastructure requirements of educational institutions,” according to an internal document, reviewed by Mint.
“Corporates who are contributing more than ₹50 crore in equity can become members of the apex advisory committee of HEFA,” the document said, underlining that the ministry would “maintain a high level of transparency through our disclosures and our work towards raising the bar of higher education standards in India”.
Right now, HEFA has an equity funding of ₹3,300 crore and the ministry is looking to take it up to ₹10,000-12,000 crore, so that it becomes easier to raise ₹1 trillion, or eight to 10 times the equity amount, said one of the two officials cited above, on conditions of anonymity.
“Bringing in industries or industrialists or high net-worth individuals for HEFA equity will have three benefits. One, structured and clean private funding. Two, outside experience of managing higher education funding. And three, curb chances of manipulation at the institutional level,” said the second official.
These funds, however, will not be part of a company’s corporate social responsibility expenditure, given that CSR money cannot be used for equity funding.
According to the plan, other than private funding, the Union government is also seeking approvals from the finance ministry and the cabinet for a ₹50,00 crore equity funding for HEFA.
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