By Rajiv Shukla
NEW DELHI : Finance Minister's budget proposal to
create a National Testing Agency (NTA) and the
subsequent announcements by Higher Education Minister
Prakash Javadekar on February 5 have triggered off
apprehensions in the higher
education sector -- lurking fears
that reforms may do more harm than good to the sector.
The first to react to these fears were the Indian Institutes of
Technology (IIT) professors who said, in a hushed tone, that
they will continue with their (Joint Entrance Exam)
Advanced to pick students for admission to the IITs. The
Indian Institutes of Management (IIMs) too are planning to tell
the HRD minister that handing over Common Admission Test
to a newly created agency would dilute its quality
An outspoken IIT-Kanpur professor who refused to be
named said that his contention has the legal backing of
13-judge Supreme Court judgement in
TMA Pai Foundation
case which even the United Progressive Alliance in 2013
couldn't overrule. He said that in 2013 the IITs retained the
power to hold entrance test for undergraduate
programmes within their jurisdiction.
The HRD ministry then wanted to hold a common entrance
test for all engineering colleges but had to tweak its
plan, succumbing to the IITs' protest.
The ministry then agreed to hold the Joint Entrance Test
(JEE) in two parts - JEE-Main and JEE-advance - with the
second test to be held by the IITs for filling their
seats and the first by the Central Board Secondary
Education (CBSE) for admission to other centrally funded
The IIMs too have the case on their side. The
TMA Pai Foundation
case and the subsequent related
time and again asserted the institutions' right to hold
their own common admission test and to pick students
from its merit list.
The talk about NTA have been doing the rounds for nearly
two years but it is only now that a formal proposal has come
up from the government. Once approved, the proposal will
take at least two years to materialise and till then the
status quo will have to continue. This was confirmed by
the HRD minister himself at the February 5 press
However the most serious apprehensions about the
proposed NTA are about its security setup and procedural
delays. The agency would be a government agency and it
would naturally be prone to all the security lapses that
such an agency normally has. The UPSC and the state
recruiting and testing agencies have not left an
impressive image. The more powerful the agency the more
prone to corruption it would be. The AICTE and the MCI
record too have not been above board in this regard.
Cabinet okays Higher Edu Finance Agency
NEW DELHI: On September 12, 2016 the Union Cabinet,
chaired by Prime Minister Narendra Modi, gave its nod to
a proposal of the HRD ministry for creation of Higher
Education Financing Agency (HEFA). The HEFA would
provide the much needed funds to boost research oriented
infrastructure for premiere institutions like IITs, NITs
Speaking to reporters soon after the cabinet meeting
HRD minister Prakash Javadekar said HEFA would be
jointly promoted by the identified promoter and HRD
ministry with an authorised capital of Rs 2,000 crore of
which government equity would be Rs 1,000 crore.
The HEFA would be formed as a SPV within a PSU Bank/
Government-owned-NBFC (Promoter) and it would leverage
the equity to raise up to Rs 20,000 crore for funding
projects for infrastructure and development of world
class labs in institutions like IITs, IIMs and NITs etc,
The HEFA would also mobilise CSR funds from PSUs and
Corporates, which would in turn be released for
promoting research and innovation in these institutions
on grant basis, a statement released by the ministry
HEFA would finance the civil and lab infrastructure
projects through a 10-year loan, the statement said,
adding that principal portion of the loan will be repaid
through the 'internal accruals' (earned through the fee
receipts, research earnings etc) of the institutions.
The Government would service the interest portion
through the regular Plan assistance. All the Centrally
Funded Higher Educational Institutions would be eligible
for joining as members of the HEFA.
When asked how HEFA would raise funds, officials said
that it could be through bond market by floating
education bonds or through debt market.
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 the 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, the statement
The HRD minister also said that he is planning to
introduce target-based bonuses and penalties for
educational institutions like it is done in the case of
roads and highways.
"If a project is completed before time, we will provide
a bonus and if it is not completed as per schedule,
there can be a penalty for the concerned entity,"
Asked if the creation of HEFA would also have an impact
on funds allotted to premiere educational institutions
during budget, Javadekar said that this initiative does
not mean that budget funds would get reduced.
Responding to questions, he also said that this also
should not be viewed as a proposal to increase fees.
He said institutions like IISERs require more funds than
what they generate from fees and HEFA funds will help
There is a several year backlog in terms of
infrastructure, which will be met, the HRD minister
These institutes can return the principal sum from
their earnings from activities like research and
consultancy, while the government can take care of the
interest part, he said.
Officials said that two Public Sector Banks have shown
interest in becoming a partner in HEFA SPV and a
decision will soon be taken in this regard.
The HEFA Board will be chaired by Secretary, Higher
Education in the HRD ministry, a source said, adding
that managing funds would be left to banking and finance