The Hefa guidelines have been reviewed following a detailed review by the finance ministry. Hefa, which was incorporated in 2017, was authorised to leverage funds from the market, supplement them from donations and CSR funds, to finance infrastructure in higher education institutions. In 2018, the Cabinet expanded the scope of the Hefa to include Kendriya Vidyalayas, Navodaya Vidyalayas, AIIMS and other institutions of higher learning. These were classified under five windows with Window IV including newly established institutions started after 2014 and Window V including other educational institutions and grant-in-aid institutions of the health ministry.
A recent review by the finance ministry has revealed that Hefa had not been able to leverage the equity provided by the Centre and had only managed to raise commercial loans from the State Bank of India. The new guidelines framed by the finance ministry, reviewed by ET, state: “It is clear that Hefa has not so far been able to fulfil its basic mandate of leveraging the equity provided by the government in terms of raising debts and bonds. It has only been able to raise commercial loans from the State Bank of India till date worth Rs 2,000 crore for which interest is being charged at 8.5%. This effectively means that Hefa is charging interest from the government on the equity provided by it. Further, the rate of interest at which Hefa has been able to raise commercial loans is far in excess of the borrowing rate of the government.”
Following this, the health ministry has directed that no Hefa loans would be availed for new AIIMS projects or any on-going revamp projects. The directives have been sent to the AIIMS directors at Bhopal, Patna, Bhubaneswar, Jodhpur, Raipur, Rishikesh, Mangalagiri and Nagpur.
Terming the practices employed at Hefa as against the concept of the transparent budget making process, finance ministry said: “This arrangement of off balance sheet borrowing is considered to be very expensive since direct borrowing by the government of India would be much cheaper. The arrangement of equity provision by the government through GBS to Hefa and then to pay interest on the same amount to Hefa through the administrative ministries is also against the concept of the transparent budget making process.”
The finance ministry review has revealed that so far projects worth Rs 40,192.25 crore have been approved for funding through Hefa. Of this, a loan amount of Rs 29,233.84 crore has been sanctioned and Rs 7,784.07 crore disbursed. Of the total projects worth Rs 40,792.25 crore, Windows IV and V projects amount to Rs 25,481.69 crore while the projects under Windows I, II and III amount to Rs 14,710.56 crore.