Cash-starved IIT-B repays Centre’s ₹41.5-crore loan

MUMBAI: A cash-strapped Indian Institute of Technology-bombay (IIT-B) paid ₹41.5 crore to Higher Education Financing Agency (HEFA), a joint venture of the Central government and Canara Bank, in the academic year 2018-19. According to the annual report of the institute, despite an annual fund deficit of ₹82 crore, the institute had to repay a loan sought from HEFA, further crippling its finances.

The institute has diverted funds from its income towards repaying the loan. IIT-B’S primary sources of income, apart from government funding, are donations, patents and fees charged for research and development work. As per HEFA, around one-tenth of the loan amount has to be paid every year.

HEFA provides interest-free loans to premiere institutes for carrying out infrastructure and research work.

According to sources, IIT-B — one of the six Institutes of Eminence (Ioes) — received a loan of ₹520 crore from HEFA in 2017. HEFA had, at that time, sanctioned loans to the tune of ₹2,000 crore to six IITS and National Institutes of Technology (NITS). Of the ₹520-crore loan, IIT-B repaid the first instalment of ₹41.5 crore, despite a financial strain that has marred the institute’s workings.

The repayment of HEFA loan comes at a cost, said professors at the institute. Last month, the institute’s director Subhasis Chaudhuri had called an emergency meeting with the faculty to brainstorm on ways to generate funds.

HT had reported that faculty members were asked to bring in sponsors as well as to offer renaming of infrastructure after alumni in exchange for donations. Chaudhuri refused to comment on this piece and registrar

R Premkumar did not respond to emails, despite repeated attempts.

Over the past three years, IIT-B has recorded an annual deficit of around ₹100 crore. According to a report by the institute, 44% of its funding comes from the Central government, while project funding makes up for 34% of its income. IIT-B institute spends 54% of its income on salary, wages and retirement benefits for employees.

However, the flow of funds from MHRD has shrunk significantly. As an IOE, the institute is set to receive ₹1,000 crore from the Central government over the course of five years. But so far the institute has received around ₹43 crore. A senior faculty member told HT, IIT-B spends around ₹10 lakh on each student. However, with the number of students increasing every year, the institute is staring at a serious gap.