Revised Block Grant Scheme for funding to IITs and IISc Bangalore

The Union Cabinet has approved the proposal for introduction of a Revised Block Grant Scheme for funding Non-Plan expenditure to Indian Institutes of Technology (IITs) and Indian Institute of Science (IISc.), Bangalore, for the five financial years from 2012-13 to 2016-17.

The amount computed as non-plan grants for the IITs will be based on student strength. Expenditure on scholarships / fellowships being a planned activity shall henceforth be funded through plan funds.

The Block Grant Scheme provides for matching grants from the government for the savings made by the institute from revenue expenditure. This is expected to instill fiscal discipline among the institutes and encourage them to generate more resources.

The features of the proposed Block Grant Scheme are as follows:-

• Component-wise Block grant in a year = (Students strength X Average component cost per student) + (Increase in component amount by indexing 2010-11 figures to the rate of inflation per annum).
• Expenditure on Scholarship/ Fellowship may be met from the plan grant.
• The Government will provide matching grant equivalent to the fund generated in excess of 30% of the actual revenue expenditure.
• Component-wise Block Grant amount shall be calculated as a whole for seven older IITs and IIT(BHU), Varanasi. Allocation to be made amongst institutes depending on their specific requirements.

The financial health of IITs and IISc., Bangalore will improve and these institutes will be encouraged to generate more revenue which will in turn enable them to achieve further financial/functional autonomy.

Eight IlTs namely, IIT, Bombay, Delhi, Kharagpur, Kanpur, Madras, Roorkee, Guwahati, BHU(Varanasi) and USc. Bangalore will be benefited by the revision in the scheme.

Beginning from the year 1993-94, with the approval of the Cabinet, the Non-Plan of each Institute was fixed at the level of the Revised Estimates (RE) 1992-93, plus 10% thereof. In 2005 the Cabinet has approved a new formula for funding non-plan expenditure of IITs - 90% weightage to be given to student intake and rest based on performance of IITs.

The base year for determining annual grant-in-aid from 2005-06 to 2009-10 shall be 2004-2005.

IITs and IISc, Bangalore have accumulated huge deficit on non-plan on account of various reasons like Grant amount had remained frozen since 2002-03 onwards, merger of 50% DA with salary, 50% enhancement of PG and Ph.D scholarship and so on.

Expenditure involved:
Based on the students strength of IlTs and IISc., Bangalore during 2012-13, Block Grant for the year 2012-13 may be worked out as under:-

In addition to the expenditure of Rs.156269.30 lakhs, an additionality was also required to be made in 2012-13 by indexing these figures to the rate of inflation per annum, taking 2010-11 as a base year.

Allocation of Rs.131559.00 lakhs for IlTs and Rs. 21853.00 lakhs for IISc., Bangalore towards non-plan was made in financial year 2012-13.