The HRD Ministry is likely to bring a bill in the Parliament regarding setting up of a finance corporation that would provide low-interest loans to higher educational institutions.
The Ministry has already prepared a concept note on creation of National Higher Education Finance Corporation (NHEFC). According to official sources, it has started drafting the NHEFC bill.
Initially the centre was confused whether to set up this body under an act of Parliament or register it under Section 25 of the Companies Act. But now it has been decided that the proposed body will be created by an act of Parliament and not under Companies Act, 1956.
As per the ministry's plan, the proposed NHEFC would be an institutional mechanism responsible for the investment needs in higher education sector. It would provide loans at low interest rates to bodies for setting up higher and vocational institutions in educationally backward areas.
A senior official said, "It will be a NABARD like institution in higher education. It will raise debt by issue or sale of bonds for augmenting resource from the market. It will finance creation of universities. It will grant low-interest loans to philanthropic bodies to come forward in opening institutes."
This is a significant move as the requirement of funds for expansion of higher education in 2009-10 is expected to be Rs. 60,000 crore.