Higher Education Financial Agency (HEFA) is to be set up by the government to encourage research in institutes like IITs, IIMs and other higher education institutes. The fund of up to 20,000 crores can be given to these institutes to build up research oriented infrastructure which can meet up to the international standards.
In the Union cabinet meeting, chaired by the Prime minister Narendra Modi, the proposal to set HEFA was cleared by the cabinet. HEFA would be jointly promoted by an identified promoter and HRD ministry with an authorized capital of 2,000 crores.
In a statement released by HRD ministry, it is said, "The HEFA would also mobilize Corporate Social Responsibility (CSR) funds from PSUs and corporates, which would be in turn released for promoting research and innovation in these institutions on grant basis."
It adds, "HEFA would finance the civil and lab infrastructure projects through a 10-year loan. The principal portion of the loan will be repaid through internal accruals (earned through fee, researches, etc.) of the institutions."
HEFA would be formed as a special purpose vehicle (SPV) within a PSU bank or a government owned NBFC. It would be the promoter of HEFA. It would be set up under Companies Act. It will be registered under RBI as Non-Banking Finance Company (NBFC).
All centrally aided institutes for higher education will be added as the member of HEFA. It will be consisting of a board of five members and five institutions. The members of Board will be selected on a rotational basis.
The prime motive of HEFA would be to obtain fund from market and add them up with CSR funds and donations. These funds will be used to build up world class infrastructure in IITs, IIMs, NITs and central universities.
The initial government contribution will be 1,000 crores and 1,000 crores will be given by the five corporate donors. The debt funding of 10,000 crores can be raised by the body. The institutions can credit money from HEFA within a prescribed limit. Government is also planning to give target based bonuses and penalties to the institutions.