In a yet another bailout that will go down well with the political class, the government has proposed one-time assistance to state government and private universities and colleges that do not get any financial assistance from the University Grants Commission, the country's higher education standards regulator, which also funds institutions.
The size of the scheme is estimated at Rs 14,000 crore over five years till 2012, with the funding being split equally between the Central government (which funds the UGC) and the states where the beneficiary institutions are located.
The Union Budget has already earmarked Rs 335 crore for fiscal 2008-09. The beneficiary institutions and their fund requirements are being finalised. The UGC approved the scheme around six weeks ago. The plan is likely to be announced in the last week of July.
This one-time assistance, which is akin to the farm loan waiver package, has multiple implications.
In the current political environment, the scheme will find favour with educational trusts and societies run by politicians all over the country. The states will also benefit as their institutions will be able to hire staff and build more facilities.
The scheme will cover those state institutions that otherwise are not eligible for grants under the ambit of Section 12B of the UGC Act, 1956. This section prohibits UGC from giving funds to a university set up after 1972 unless it deems it fit after an assessment of the institution and its facilities.
There are over 17,700 colleges in India. Of these, a mere 200 are autonomous. The remaining 17,500-odd are affiliated to 131 universities. On an average, each university has 100 affiliated colleges, but there are some universities with over 400 affiliated colleges.
State universities and under-graduate colleges in India have inadequate infrastructure and facilities. In a "what comes first: the chicken or the egg" situation, these institutions do not receive start-up "development" grants from the UGC since they do not have adequate infrastructure.
The infrastructure in such institutions remains in the rut forever. As a result, they never become eligible for the Section 12B assistance.
A key pre-condition for the grant is that the states have to contribute 50 per cent of the developmental assistance for the institutions that are promoted by them.
In case of private, state-funded colleges, 25 per cent of the total cost of development will have to be contributed by the private trust or the society that manages the institution.
Another 25 per cent will have to come from the state coffers. The UGC will chip in with the balance 50 per cent.