Absence of Private Investment and Donations through HEFA
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Higher Education Finance Agency was launched in the year 2017, with the expectation to rope in private sector investment in public educational institutions across India. Till now, no institution could succeed in raising funds from the private sector by way of equity subscription or corporate donations through HEFA.At the time of its launch, HEFA had set a target to mop up to Rs 10,000 crore from the market for granting infrastructure loans to public higher education institutions. Its scope was expanded under RISE 2022 or Revitalising Infrastructure and Systems in Education by 2022 to raise Rs 1,00,000 crore through government bonds and commercial borrowing. But despite tapping borrowed sources, HEFA has failed to attract private investors.Allocation of CSR funds to PM CARES: Apart from the private investment not coming, a big chunk of HEFA’s CSR funds, earmarked for research work, has been diverted to PM CARES. PM CARES was constituted in the midst of the COVID-19 pandemic. Many have termed it controversial because it runs parallel to the existing PM National Relief Fund. The money allocated to the PM CARES fund does not come under the ambit of the Right to Information Act nor public audit.
Data states that more than two-third, that is Rs 9.31 crore in the financial years 2021-22 and 2022-23, out of Rs 13.56 crore, of the CSR spend of HEFA has been contributed to the PM CARES.Performance and Impact of HEFA It has sanctioned loans worth Rs 33,476 crore and disbursed Rs 13,935 crore to 85 institutions as of 2021-22. Both figures are, however, short of the initial target that aimed at raising Rs 1,00,000 crore by 2022 .The poor performance of HEFA combined with diversion of CSR funds to the PM CARES fund has taken a toll on the performance of HEFA and the finances of the educational institutions. Canara Bank, the Ministry of Education’s partner in HEFA, expressed disappointment over its performance and had even threatened to pull out of the venture,. How HEFA Works HEFA has been set up jointly by the Ministry of Education and Canara Bank. The setup date is 2017, as a nonbanking finance company to extend financial assistance for the creation of educational infrastructure and research and development (R&D) in India’s premier educational institutions. It enjoys 90.91% equity by the government and another 9.09% by Canara Bank.In its wisdom, HEFA had conceived the dream of attracting private investment and CSR donations to provide differential infrastructure loans to public institutions and grants for research .
Conclusion: HEFA has failed to attract private investment and corporate donations, and its CSR funds have principally been diverted to the PM CARES fund. This damaged the performance of HEFA and also the monetary situation of academic institutions.
