SPV s to Aid Direct Funding for Universities
Ten high-performing state universities are now setting up special purpose vehicles companies to receive the funds directly from the Central government. This model is being explored to cut the red tape.
How the new Model would work?
- The selected universities are required to create a special purpose vehicle (SPV) under the Companies Act.
- These campus companies would be headed by the varsity vice-chancellor and would comprise faculty members as well as domain experts.
- The Ministry of Human Resource Development will transfer the funds directly to these SPVs.
- These SPVs will also be mentored by foreign universities such as UC Berkeley, Cornell and the University of Pennsylvania.
This direct funding model also takes forward the idea of Higher Education Financing Agency (HEFA). These SPVs are also empowered to raise funding from other resources.
Overcoming the Red Tapism
- Since Education is a concurrent subject in India the duties are split between the State and the Union governments.
- As a result, the central government grant to a state university usually takes this route: HRD ministry to state finance ministry to state education ministry to the university.
- The university may have its own administrative structure to supervise, allocate and implement the projects.
- This multi-level hierarchal system had led to a prolonged process, delays and Redtapism.
The new approach through SPVs will aid in cutting the redtapism. The universities with NAAC (National Assessment and Accreditation Council) ratings of over 3.51 are selected for direct funding and it includes Pune’s Savitribai Phule University, Kolkata’s Jadavpur University, Haryana’s Kurukshetra University, Karaikudi’s Alagappa University and Hyderabad’s Osmania University.