New Delhi: A committee of Indian Institute of Technology (IIT) directors tasked with finding ways to achieve greater financial autonomy for the schools has suggested an over threefold hike in student fees and creation of a Rs 2,000-crore nonbanking financial company. The NBFC will offer interestfree loans for futuristic projects, research infrastructure and efficient use of space on campus.
The proposals are being considered and could be among the budgetary announcements this year, officials told ET. Finance minister Arun Jaitley will present the Budget at the end of the month. The committee, which includes the directors of the Bombay, Madras, Kanpur and Hyderabad IITs, has drawn up a ‘Roadmap to Financial Autonomy of IITs’ in consultation with the human resource development (HRD) and finance ministries.
The panel has suggested that the IITs be allowed to raise annual student fees to Rs 3 lakh from Rs 90,000. This, the committee has observed, will be enough to cover costs incurred by way of salaries and maintenance, said the people cited above. The issue had first come up for discussion at the meeting of the IIT Council, which is chaired by the HRD minister, in October 2015 and was then referred to the committee. Inter-ministerial meetings have already been held on the issue and the finance ministry is said to have been open to the idea of setting up an NBFC. The matter would, however, have to go to the Cabinet for formal approval at some stage.
Of the Rs 2,000-crore corpus, half will come from the government and the rest from corporate social responsibility (CSR) initiatives. The broader objective is to be able to grant interest-free, 5-10 year loans to not just the 18 IITs but all higher education institutes. The estimated salary and maintenance bill at the IITs, which have about 80,000 students, is Rs 2,500 crore.The plan is to offset the fee hike through a loan programme. “The student loan will come into effect the moment a candidate is offered an admission letter,” said an IIT director with knowledge of the proposal.
“The idea is to rationalise fees in such a way that at least the salary and maintenance costs of an IIT are taken care of, else this becomes a very difficult situation. Almost 50% plan grants to an IIT are consumed by scholarships.” Another IIT director said he supported the plan. “Innovative financial methods are necessary to fund infrastructure and research development at IITs,” he said. “We cannot keep subsisting at sub-critical levels and also face all-round criticism for not making a mark globally. We need to grow as institutes and this NBFC-like system will allow us to borrow a kind of refunding loan for scaling up our infrastructure and research, building space for new faculty and more students.”
The loan will be repaid from returns on research and consultancy, he said. There will be no additional burden and it will bring down the government’s total expenditure on non-plan funding, he added. The IITs have been mulling the need for greater financial autonomy for several years now. In 2012-13, the Anil Kakodkar committee had recommended a number of models, including zero government funding and fee hikes. The proposals didn’t make much headway due to political considerations.