Delhi University (DU) will have to cough up Rs 5 crore towards stamp duty to access a loan under the Union government’s policy, even as the hundred-year-old institution is struggling to run its labs.

In 2018, the government introduced a policy that replaces grants with loans for infrastructure development in public universities.

The executive council of DU, the institution's apex decision-making body, convened on Friday to receive notification of the government's approval for a loan amounting to Rs 938 crore from the Higher Education Financing Agency (HEFA). These funds are earmarked for several critical projects, including the construction of a new Faculty of Technology building, student accommodations, academic infrastructure and campus-wide Wi-Fi facilities.

Established in 2018 and headquartered in Bangalore, the HEFA operates as a pivotal financial conduit for central educational institutions, including central universities and IITs, facilitating infrastructure development through loans. Unlike the pre-2018 era, when grants were the norm, institutions are now mandated to reimburse a portion of the principal amount borrowed.

The initial disbursement from the HEFA amounts to Rs 261 crore, with DU required to remit a stamp duty of 0.5 per cent to the Karnataka government, totalling Rs 1.31 crore. Extrapolating this calculation, DU's stamp duty obligations for the entire Rs 938 crore loan amount to Rs 5 crore.

In December 2021, the executive council had resolved to augment the annual University Development Fee (UDF) from Rs 600 per student by 50 per cent.

Two faculty members criticised the government's stance on denying grants to public universities.

Rajesh Jha, a faculty member at Rajdhani College, said: "It is deeply disconcerting that while laboratories suffer from inadequate funding, the university is compelled to allocate Rs 5 crore for stamp duty in executing the loan. These funds could have been directed towards the welfare of economically and socially disadvantaged students."

He added: "The government's insistence on loan-based financing shifts the financial burden of higher education onto students and parents."

Another faculty member warned of the loan's potential repercussions, foreseeing an adverse impact on students from underprivileged backgrounds in the future.