The Ministry of Education (MoE) announced a significant change in how Higher Educational Institutions (HEIs) will receive funds. Under the proposed Viksit Bharat Shiksha Adhishthan (VBSA) Bill, 2025 , the Regulatory Council’s performance feedback will directly determine funding amounts for HEIs. This new mechanism aims to increase transparency and accountability in education finance, according to an official ministry statement.
Reforming Higher Education Funding
The VBSA Bill, 2025, introduces a performance-based funding model. The Regulatory Council will assess HEI performance. This assessment will then guide the MoE in distributing funds. This represents a foundational shift from current funding practices for many institutions. The ministry states this change supports greater public oversight of how educational funds are used.
This proposed system aligns with key objectives of the National Education Policy 2020 (NEP 2020) . NEP 2020 advocates for a clear separation between an institution’s funding and its regulatory functions. The VBSA Bill implements this by ensuring regulatory and academic councils no longer handle the direct disbursement of grants. Instead, funding decisions will hinge on evaluated institutional performance.
Current Funding Landscape
Before the VBSA Bill, different funding channels existed for various institutions. Central Universities currently receive grants through the University Grants Commission (UGC) . The MoE releases these funds quarterly to the UGC. The UGC then provides monthly disbursements to the universities themselves. This multi-step process has been the standard for central university funding.
In contrast, Institutes of National Importance (INIs) , such as IITs and IIMs, follow a direct funding model. They receive their funds monthly, directly from the Government of India. The VBSA Bill seeks to streamline and standardize aspects of this funding across different types of HEIs, focusing on performance as a key determinant for grant allocation.
The Role of the Regulatory Council
The Regulatory Council’s role will become central to the new funding model. Its feedback on the “institutional performance” will serve as the major factor in financial allocations. While the statement does not detail specific performance metrics, the emphasis is on a merit-based system. This intends to reward institutions that demonstrate strong academic and operational performance.
This shift means that an institution’s ability to meet standards and achieve educational goals will directly impact its financial support. The MoE emphasizes that this direct link between performance and funding will foster a more competitive and accountable higher education environment.
Ministry of Education’s Oversight
The Ministry of Education will directly manage the disbursal of grants to centrally funded HEIs. The ministry plans to develop new mechanisms for this process. These mechanisms will be “similar to or better than” existing systems, according to the official statement. This confirms the MoE’s direct involvement in ensuring an effective and transparent flow of funds based on the Regulatory Council’s input.
The MoE’s direct oversight aims to eliminate intermediaries in the funding process for institutional grants. This centralizes accountability within the ministry itself for the financial health and performance-linked funding of HEIs.
Continuity for Fellowships and Research
While institutional funding undergoes reform, support for individual academic and research pursuits will largely remain consistent. Fellowships, including the Junior Research Fellowship (JRF) and Senior Research Fellowship (SRF) , will continue under mechanisms similar to those currently in place. This ensures ongoing support for researchers and scholars without disruption from the new institutional funding model.
This dual approach separates institutional funding reforms from individual research grants, maintaining stability in critical areas of academic support.