RISE Scheme 2018 – Now Infrastructure Development in All Govt. Higher Educational Institutions

Published Date - 05 March 2018 06:39:12 Updated Date - 15 April 2018 02:11:21

Central government is going to launch RISE Scheme for Infrastructure development in education sector. Subsequently, govt. will provide low cost funds to all govt. higher educational institutions to promote higher education in schools. Accordingly, this scheme will cover all centrally-funded institutes (CFIs). In Union Budget 2018-19, govt. has announced the launch of this scheme with total investment of 1 lakh crore in the upcoming 4 years.

RISE stands for Revitalising of Infrastructure and Systems in Education. Under this scheme, govt. will revitalise infrastructure, open new schools for Scheduled Tribe (ST) candidates and will also promote programmes for teachers. The primary objective is to improve quality of education for students.

Restructured Higher Education Financing Agency (HEFA) which is a non-banking financial company is given the responsibility to implement this RISE Scheme.

Indian Institutes of Technology (IITs) will get largest part of loans on offer under RISE Scheme. Henceforth, this scheme will change the existing funding mechanism of grant assistance (Fixed budget grant of around Rs. 10,000 crore p.a) to CFIs. Now CFIs will get loans which will assure extra funds & greater accountability. Henceforth, this scheme will ensure efficient and timely completion of projects.

In order to mobilise funds for the Rs 1,00,000 crore corpus, HEFA will need an equity of Rs 10,000 crore, of which Rs 8,500 crore will be provided by the government. The remaining equity will be provided by Canara Bank, which partnered with the government to set up HEFA, and other corporations.

The HRD Ministry will soon seek the Union Cabinet’s approval for providing the government’s share of the HEFA equity.

All the infrastructure and research projects sanctioned by HEFA are to be completed by December 2022. Sources said the funding agency will release money directly to the vendors or contractors on certification by the executing agency and the educational institute.

Loans taken from HEFA, under the RISE programme, must be paid back over 10 years. There will be different modes of loan repayment for different institutes, based on their internal revenue. For instance, central universities set up before 2014 will be eligible to borrow through the 90:10 window, which means that they will have to repay 10 per cent of the principal amount from their internal resources. The remaining principal amount and the interest accrued on the loan will be paid by the government to HEFA.

IITs and IIMs which are over a decade old will repay the whole principal amount over 10 years, and the interest will be paid by the government. Technical institutes set up between 2008 and 2014 can avail loans through the 75:25 window. In other words, they will have to give 25 per cent of the principal amount. The balance principal and loan interest will be taken care of by the central government.

 

RISE Scheme – Details

The important features and highlights of this scheme are as follows:-

  • Under this scheme, all the CFIs including central universities, IITs, IIMs, NITs and IISERs can borrow a sum of Rs. 1,00,000 crore in next 4 years.
  • Accordingly, these govt. educational institutions can utilize these low cost funds for expansion and building new infrastructure.
  • The primary objective of RISE Scheme is to promote overall quality of higher education in all central govt. funded institutes (CFIs).
  • Subsequently, HEFA will mobilize funds from market and will offer 10 year loans to all central govt. run institutes.
  • Finance Minister Arun Jaitley has announced the launch of this scheme in Union Budget 2018-19 for quality education.

About HEFA – Higher Education Financing Agency

HEFA will finance funds for infrastructure development at CFIs in higher education. Subsequently, HEFA was set up by central govt. as Section 8 company (company having charitable objectives) in 2017. Accordingly, this company will now mobilize funds in market and will provide 10 year loans to all centrally-run institutes.

  • Equity Share –
    • For mobilization of corpus of Rs. 1 lakh crore, HEFA will require Rs. 10,000 crore.
    • Out of this total sum, central govt. will provide Rs. 8,500 crore.
    • Moreover, Canara Bank will bear the remaining amount as Canara bank was the partner of central govt. for setting up of HEFA.
  • Target –
    • All the projects whether infrastructure or research projects which are sanctioned by HEFA are to get completed till December 2022.
  • Raising of Funds –
    • Under this scheme, HEFA will directly release the sanctioned amount to vendors or contractors.
    • However, this amount will get released only after the certification of executing agency and educational institution.
    • Under RISE Scheme, all the CFIs will have to repay the borrowed amount (loans) in a time frame of over 10 years.
    • Furthermore, Loan Repayment modes will be different for institutes i.e on the basis of their internal revenue.

This is a major attempt of the Central govt. to provide quality education to all students. Accordingly, students will get better infrastructure and basic facilities which will enhance their learning capabilities. This will result in decreasing unemployment and will thus contribute towards the growth of nation.

RISE Scheme : IITs to get 25% of Govt Loans for higher education institutes

THE INDIAN Institutes of Technology (IITs) will corner the largest chunk of loans on offer under the new funding model — Revitalising Infrastructure and Systems in Education (RISE) — for all centrally-run institutes, announced in the Union Budget this month.

Under RISE, all centrally-funded institutes (CFIs), including central universities, IITs, IIMs, NITs and IISERs, can borrow from a Rs 1,00,000 crore corpus over the next four years to expand and build new infrastructure. However, The Indian Express has learnt that a quarter of this amount — Rs 25,000 crore — will be set aside exclusively for the 23 IITs.

The second largest share, Rs 20,000 crore, will be earmarked for central universities. While the National Institutes of Technology (NITs) can borrow up to Rs 11,300 crore, the new IIMs will get Rs 4,500 crore, and five IISERs Rs 5,000 crore.

According to sources, in addition to loans for infrastructure development, about Rs 9,000 crore will be available for building robust research ecosystems, like world-class laboratories, in CFIs.

With the introduction of RISE, all financing for infrastructure development at CFIs will be done through the Higher Education Funding Agency (HEFA), which was set up by the government as a Section 8 company (a company with charitable objectives) last year to mobilise funds from the market and offer 10-year loans to centrally-run institutes.

Till last year, CFIs in higher education, on an average, would get fixed Budget grants of Rs 10,000 crore every year for this purpose. According to government officials, the shift from grant assistance to loans would assure more funds, greater accountability and timely completion of projects.

 


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