Rising Debt of State-run Universities in Haryana

• 05 Mar 2025

Why in News?  

The former Haryana finance minister plans to launch a campaign highlighting the rising debt of state-run universities after the government replaced grant-in-aid with loans. 

Key Points 

• Rising University Debt: 
  • The 22 state universities in Haryana have accumulated a debt of ₹6,625.82 crore due to shift in grant-in-aid policy with loan. 
  • The rising debt could impact research, teaching, and even the survival of universities. 
• Government’s Justification: 
  • The state government maintains that the funds are provided under the scheme “non-recoverable financial assistance in the form of interest-free perpetual loans.” 
  • Officials argue that grant-in-aid counts as revenue expenditure, while loans count as capital expenditure, which is aimed at building assets and generating revenue for universities. 
• Concerns Over Self-Financing Model: 
  • Decision of giving loans instead of grant-in-aid practically means that all government universities would have to adopt a self-financing pattern which forces universities to increase fees, making higher education unaffordable for lower and middle-class students. 

 Grant-in-aid 

• Grants-in-aid are payments in the nature of assistance, donations or contributions made by one government to another government, body, institution or individual.  
• Apart from Grants-in-aid given to the State Governments, the Union Government gives substantial funds as Grants-in-aid to other agencies, bodies and institutions.  
• Similarly, the State Governments also disburse grants-in-aid to agencies, bodies and institutions such as universities, hospitals, cooperative institutions and others.  
• The grants so released are utilized by these agencies, bodies and institutions for meeting day-to-day operating expenses and for creation of capital assets.