Union Budget 2022: IIMs get INR 653.92 cr, HEFA loan interest down to INR 50 cr

This year, IIMs’ Gross Budgetary Support (GBS) is INR 323 crore, more than double of last financial budget's allotment, i.e. INR 141 crore.

Indian Budget 2022: Indian Institutes of Management (IIMs) have been allotted INR 653.92 crore. This year's budget has gone up by approximately 37 per cent as compared to last financial year’s INR 476 crore. Union Finance Minister Nirmala Sitharaman released the annual budget 2022-23 on February 1. With the allotment of over INR 1 lakh crore to the two departments of the education ministry, the budgetary allocation witnessed a total of 11.86 per cent jump, i.e. INR 11,053.41 crore.

According to the budget allocations, this year, IIMs’ Gross Budgetary Support (GBS) is INR 323 crore, more than double of last financial budget's allotment, i.e. INR 141 crore. However, the ministry has decreased interest under HEFA Loan by 44 per cent, i.e. INR 50 crore. This was INR 85 crore in the year 2021-22. It appears that the government has considered the decrease in HEFA loan amount as the revised 2021-22 budget revealed that only INR 20 crore was utilized for interest under HEFA Loan.

Meanwhile, for the year 2021-22, the amount allotted for repayment of the principal of HEFA Loan was INR 250 crore. For the budget 2022, the amount has been increased to INR 280.42 crore.

Let's take a look at what are the thought of faculty and heads of management institutions on budget 2022: 

Budget 2022 attempts to balance long-term aspirations with short-term economic recovery

Welcoming the Union Budget 2022, IIM Indore Director, Professor Himanshu Rai said, “The Budget 2022 attempts to balance long-term aspirations with short-term economic recovery. The government has focused on start-ups in the high-tech industry like electronics, gaming and software development. Production linked incentives allocation has been enhanced substantially. The time limit for incorporation for eligible start-ups for claiming income tax holiday incentive has been extended by one more year to March 31, 2023, which will give liquidity, and thus growth in start-ups. More eligible start-ups will get incorporated in 2022-23.

Further, capping of surcharge on long term capital gains on the sale of unlisted equity shares (from graded surcharge up to 37% to 15%) will reduce the effective long term capital gains tax rate from 28.49 per cent to 23.92 per cent. This reduction will help in more money in the hands of investors, founders and founding team members, thus motivating more and more people to establish a start-up.”

The professor further added, “The government strategy of driving growth by investing in capital expenditure (a sharp jump of 35.4 per cent) should yield good results. The government strategy of self-reliance through protection for domestic manufacturers is good. Central Bank Digital Currency will help reduce corporate loans as pressures will add up to banks. GoI is expected to gain INR 65,000 Crore through divestments. The Economic Survey mentioned that the government needs to provide a buffer against stress. The government has tried to manage these things by increasing investment in capital and start-ups.”

PM e-Vidya expansion against reality. Barely 8% of rural & 23% of urban students have internet access

According to Tarun Jain, Associate Professor of Economics, IIM Ahmedabad, “The Finance Minister has increased budgetary allocation in online education (Digital University) and TV-based education (PM e-Vidya). This has to run against the reality that barely 8% of rural students and 23% of urban students have access to the internet. Even when students have internet access, the quality of online education remains poor. We have to benchmark the budget commitments against the aspirations of the Indian people. High-quality education is both a critical component of what young people hope for and also have some of the highest returns on investment in the economy. Thus, the government should consider boosting investments in public education considerably.”

However, Vaidyanathan V, CFO At Great Lakes Institute of Management, Chennai thinks “The Budget 22 has provided a much-required push to the economy by increasing the allocation to Capital Expenditure by about 35%. The budget has given thrust to the Gati Shakti – for sustainable growth. The budget has also given a push to the digital economy, introduction of Digital currency starting 200 TV channels to fill the gap in the learning of the children due to the pandemic are some of the welcome points. Repealing 1486 Acts, which were redundant, the introduction of e-passport, thrust for EV (electric vehicle) by the introduction of charging stations and battery swapping are all welcome moves. Modification to the filing of tax returns for rectification/ including left out income at a nominal fee is a welcome move to avoid litigation.”

Budget 2022 ensures education remains at India's top priority

Stating that the union budget seems to be determined to transform the education system, Nitish Jain, President – S P Jain School of Global Management, said, “From the standpoint of higher education, the budget is headed in the correct path by focusing on improving the digital infrastructure in the country. Moving ahead, the execution, and how quickly these things move will be the most important factors to watch. Education is what propels the economy and the country forward, and I am confident that Budget 2022 will go a long way toward ensuring that education remains at the top of our country's priorities.”

Dr Dishan Kamdar, Vice-Chancellor, FLAME University said, “The decision to establish the digital university is a disruptive and futuristic decision that will benefit a large number of students even from the remotest part of the country by making world-class education accessible. This will surely give wings to the dreams of deserving students and meet the goal of providing high-quality education to all students across the country."

"The plan to increase the 'One Class One TV Channel' from 12 to 200 TV Channels in all States in India will enable students to learn through radio and DTH channels thereby overcoming the problem of internet connectivity. The two decisions truly reflect the Government’s aims to leverage technology advancements and use them as tools to meet the educational aspirations of a large number of students in the country. They have set an example that is worthy of being emulated by others," he added. 

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