The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal for expanding the scope of Higher Education Financing Agency (HEFA) by enhancing its capital base to Rs. 10,000 crore and tasking it to mobilise Rs. 100,000 crore for Revitalizing Infrastructure and Systems in Education (RISE) by 2022.
The Cabinet has also permitted the HEFA to mobilise Rs. 1,00,000 crore over the next 4 years till 2022 to meet the infrastructure needs of these institutions. The CCEA has also approved increasing the authorized share capital of HEFA to Rs. 10,000 crore, and approved infusing additional government equity of Rs. 5,000 crore (in addition to Rs. 1,000 crore already provided) in HEFA.
The CCEA has also approved that the modalities for raising money from the market through government guaranteed bonds and commercial borrowings would be decided in consultation with the Department of Economic Affairs so that the funds are mobilized at the least cost.
This would enable addressing the needs of all educational institutions with differing financial capacity in an inclusive manner.
This would enable HEFA to leverage additional resources from the market to supplement equity, to be deployed to fund the requirements of institutions. Government guarantee would eliminate the risk factor in Bonds issue and attract investment in to this important national activity.
HEFA has been set up on 31st May 2017 by the Central Government as a Non Profit, Non Banking Financing Company (NBFC) for mobilising extra-budgetary resources for building crucial infrastructure in the higher educational institutions under Central Govt. So far, funding proposals worth Rs. 2,016 crore have been approved by the HEFA.