FICCI asks Finance Ministry to Let Higher Education Institutions to Invest Surpluses in More Asset Classes
According to FICCI, granting university endowments for investments in multiple investment funds and other classes of an asset will usher in more transparency and better practices of governance in the system.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has recently suggested to the finance ministry of India that the higher education institutions should be able to invest their surpluses in a larger range of asset classes.
According to FICCI, granting university endowments for investments in multiple investment funds and other classes of the asset will usher in more transparency and better practices of governance in the system. This was amongst other pre-Budget recommendations made by FICCI to the ministry.
India's higher education sector is set to witness a number of reforms with the increasing need for a knowledge economy along with huge human capital and internationalization, it stated on Friday.
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The revenue initiated by the higher educations of India has been estimated to surge by Rs 1 lakh crore which constituted approximately 20 per cent of the overall size of charitable institutions. The total operating expenditure in which has been estimated to be approximately Rs 5 lakh crore as of 2017-18.
It added that there is a remarkable surplus generated in the higher education system each year which amounts to around Rs 15,000 crore.
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Having said that, the higher education system of India is facing constraints for investing excess funds. As of today, real estate gets the most funds. However, there are transparency issues in these investments.
It added that the higher education institutions have been investing at the global level in order to ensure additional income including various asset classes like foreign and domestic equity, real estate, investment funds, and infrastructure investment trusts.
These investments have led to higher returns and growth of endowment funds of the institutions, FICCI said.