Covid-19 hit finances at IITs as income from fees declined

The Covid-19 pandemic, the subsequent lockdown and a decline in receipt of fees affected the finances of Indian Institutes of Technology (IITs) across the country

The Covid-19 pandemic, the subsequent lockdown and a decline in receipt of fees affected the finances of Indian Institutes of Technology (IITs) across the country.

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At IIT-Bombay, the total income — recurring and capital — declined by ₹25 crore in 2020-21 compared to the year before. “Overall, the balance of finances was not affected much. Naturally, the expenditure on operations and maintenance, other than Covid-related ones, was correspondingly less due to regulated functioning of offices, departments and labs as per government orders, work from home, fully online teaching etc.,” said Prasanna M Mujumdar, deputy director, finance and external affairs, and professor in the department of Aerospace Engineering at IIT-Bombay. He said the overall reduction in total income was less than 10%.

As the pandemic struck last year, internal revenues of IITs took a blow. The primary source of income at all IITs is the academic receipts of tuition fees, hostel rent and rent collected from commercial establishments on campus.

“Due to Covid-19 we received less income from seat rent and commercial establishments and the grant from ministry of education (MoE) was also reduced due to budget cuts. Due to the reduction in operating costs such as lower electricity consumption, almost no travel and less consumables, the institute managed with the reduced funds,” said Bhaskar Ramamurthi, director, IIT-Madras. A senior official at IIT-Delhi, too, confirmed that income received in 2020-21 was less than the year before.

Most IITs have been reporting a funds deficit in their annual reports for the past few years. IIT-Bombay, for instance, has recorded deficits to the tune of ₹100 crore a year.

In a bid to make IITs self-sufficient, the Central government has been weaning grants. Instead, IITs now take loans from Higher Education Funding Agency (HEFA) for infrastructure and other projects. The principal is to be paid by the institute while the interest is paid by the ministry of higher education.

IIT-Bombay has so far sought loans worth ₹491 crore — ₹410 in the first phase — for various infrastructure projects. Of this, the institute has repaid ₹73.35 crore from its internal revenue. “The institute escrows ₹41 crore each year for Phase-1 loan. This is set to increase to around ₹49 crore from this year, as Phase-2A of the loan has started,” said Mujumdar.

IIT-Madras, too, pays around ₹50 crore a year towards HEFA loans, said Ramamurthi. “The loan is paid off in 10 equal instalments over 10 years. So we are repaying about ₹50 crore per year. We have paid instalments since 2019,” he said.

With reduced income, repaying HEFA loans has become a challenge. IIT-Madras availed of a moratorium in payment last year while IIT-Bombay sought a moratorium but eventually did not avail it. “A request was made by IIT-B. I think MoE had clarified that conditional moratorium can be provided in line with Reserve Bank of India circular and requested a confirmation to place the matter before HEFA board. However, on consideration of the financial position, estimates and projections, IIT-B did not opt for any moratorium,” said Mujumdar.

Ramamurthi said, “IIT-M is growing rapidly in its research output, and with the increase in student population to 10,000 and more, the faculty strength is also steadily going up towards 1,000. We need to add infrastructure as well as launch global scale research efforts. We are also internationalising by admitting more foreign students, recruiting foreign faculty and entering into joint academic programmes with top universities worldwide. This is the time the institute needs more investment in infrastructure and research equipment. Our ability to grow will be determined to a significant extent on our ability to raise money for these investments.”