The Central government has in this year's Budget announced a major financing scheme for higher education.
With a minor increase in the Budget allocation for education, as compared to last year's Budget, higher education has been the main focus this year. From Rs 81,868 crore in the year 2017-18, the Budget for education has gone up to Rs 85,010 crore for fiscal 2018-19.
The Central government has in this year's Budget announced a major financing scheme for higher education. With a budget of Rs 1 lakh crore, 'Revitalising Infrastructure and Systems in Education' (RISE) seeks to develop infrastructure in higher education institutes by 2020. This scheme is a major reform for higher education sector in the country.
The centrally funded technical institutes including the Indian Institutes of Technology (IITs), National Institutes of Technology (NITs), and Indian Institutes of Management (IIMs) will not be provided grant-in-aid anymore. Under the new funding scheme, these institutions will pitch in 25 per cent of the required funds.
Each institute will now have to seek funds on the basis of project proposals and seek loans from the Higher Education Financing Agency (HEFA) to fund the same. While the government will bear the cost for 75 per cent of the principal amount and the interest incurred, the institute will have to pay 25 per cent of the principal cost, which they will have to generate through user charges, research and student fee.
In case of central universities, which have constraints in raising student fee, they will have to only pay 10 per cent of the principal amount.
In the wake of this, individual budget allocation to IITs and IIMs has also been reduced as compared to last year, specially to IITs. As opposed to Rs 8,000 crore allocated to IITs, this year Rs 6,000 crore was allocated.
"Rupees One lakh crore for Revitalising Infrastructure and Systems in Education is a huge gift of this Budget," said Human Resource Development Minister Prakash Javadekar.
Finance Minister Arun Jaitley also proposed to replace the existing 3 per cent education cess on personal income tax and corporation tax with a 4 per cent 'Health and Education Cess' to take care of the education and health needs of poor families.
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