Government Announces Rs 2,000 Crore Worth Interest Free Loan For IITs
Union Human Resource Development Minister Prakash Javadekar, on Wednesday, announced that six chosen institutions would be provided Rs. 2,000 crore interest free loans by the government to encourage research in higher education institutions.
Praksh Javdekar tweeted that the Higher Education Financing Agency (HEFA) will approve Rs. 2,000 crore interest-free loans for six institutions to promote research, academic and infra projects.
The said six institutes which have been shortlisted to receive the loan are IIT Kanpur, IIT Delhi, IIT Bombay, IIT Madras, IIT Kharagpur and CSE, National Institute of Technology, Surathkal, Karnataka.
HEFA, formed as a special purpose vehicle, would raise through debt market Rs 20,000 crore and then it will provide interest-free loans to create infrastructure in higher learning centres, essentially, research infrastructure in such institutes.
In September 2016, the Union Cabinet had approved the establishment of HEFA and on February 16, 2017 Canara Bank signed a MoU with MHRD to operationalise the agency.
The principal portion of the HEFA loan will be repaid through 'internal accruals' of the institutions and the Government would service the interest portion through regular plan assistance, said the tweet by Mr. Javadekar.
According to the minister, all the centrally funded higher educational institutions are eligible for joining as members of HEFA.
For joining as members, the institution should agree to escrow, a specific amount from their internal accruals to HEFA for a period of 10 years.
This secured future flows would be securitised by HEFA for mobilising the funds from the market. Each member institution would be eligible for a credit limit as decided by HEFA based on the amount agreed to be escrowed from the internal accruals.
(With Inputs from IANS)
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