NEW DELHI: The Union Human Resource Development (HRD) Ministry is pushing for changes in public finance norms to provide an incentive to Central universities to generate resources on their own.

As of now, any attempt by universities to raise resources from elsewhere attracts a matching deduction in their grants-in-aid from the Government through the University Grants Commission (UGC).

The HRD Ministry wants the Finance Ministry to relax these norms as was done in the case of the Indian Institutes of Management at Ahmedabad, Bangalore and Kolkata, which have been allowed to not only generate resources but also build a substantial corpus of their own.

Little incentive

Subject to a maximum of Rs. 25 lakh, all other government educational institutions generating funds through consultancies or other avenues have to plough it back into the Consolidated Fund of India and also deal with a matching reduction in their grants-in-aid from the UGC.

As a result, the university system of the country has very little incentive to scout for resources outside the budgetary route; a point raised by the National Knowledge Commission (NKC) in its note on Higher Education earlier this year.

Of the view that philanthropic contributions had not been exploited to their full potential, the NKC pointed out that its proportion in the total expenditure on higher education had declined from more than 12 per cent in the 1950s to less than three per cent in the 1990s.

Calling for changes in the law, the NKC noted that there was an "explicit disincentive" in the present system. "If universities mobilise resources from elsewhere, they are in effect penalised through a matching deduction in their grants-in-aid. What we need to do is exactly the opposite."

Though the Ministry had taken up this issue in the past with the Finance Ministry, its contention has been strengthened by the NKC note. The Ministry would like the norms to be changed in a manner that would allow Central universities to retain whatever they collect from outside the official system and retain grants-in-aid coming from the UGC pool.

This, according to the Ministry, is crucial for higher education — traditionally second in priority to elementary education vis-à-vis share of government spending on education — as it is not in favour of hiking fees to generate resources.

Though the NKC had recommended increasing fees in universities to meet at least 20 per cent of their total expenditure from this source, the Ministry has wedded itself to the Central Advisory Board of Education (CABE) view. As per CABE, 20 per cent of revenue generation through fees should be the outer limit as anything beyond could seriously affect access to higher education.

Printer friendly page  
Send this article to Friends by E-Mail