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UGC-like funding mechanism to be adopted under Shiksha Adhishthan: Education Ministry

March 17, 2026 6 min read Polity & Governance Social Issues GS2
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What Happened

  • The Ministry of Education clarified before a Joint Parliamentary Committee (JPC) that the proposed Viksit Bharat Shiksha Adhishthan (VBSA) will adopt a UGC-like funding mechanism — maintaining grant disbursement to universities — while separating this function from regulatory oversight.
  • The VBSA Bill, 2025 proposes to repeal the University Grants Commission Act, 1956, the All India Council for Technical Education Act, 1987, and the National Council for Teacher Education Act, 1993, merging these three bodies into one apex commission.
  • The central rationale is separation of conflicts of interest: the UGC currently performs both roles (regulator and funder), creating structural tension — a regulator should not also fund the institutions it regulates.
  • Opposition MPs on the JPC raised concerns about increasing centralisation of higher education governance, questioning whether the new structure would adequately protect the funding autonomy of public universities (especially central universities and IITs/NITs).
  • The VBSA Bill proposes a 12-member apex Commission with three internal councils: a Regulatory Council (common regulator), Accreditation Council, and Standards Council.
  • As of early 2026, the Bill remains under JPC review.

Static Topic Bridges

University Grants Commission Act, 1956: Origin, Functions, and Limitations

The University Grants Commission (UGC) was established as a statutory body on 28 December 1953, and formally constituted under the University Grants Commission Act, 1956. It operates under Entry 66 of the Union List (Seventh Schedule): "Co-ordination and determination of standards in institutions for higher education or research and scientific and technical institutions." The UGC's twin functions — disbursing grants to universities and maintaining standards — have always carried an inherent conflict of interest: institutions dependent on UGC funding may be reluctant to resist UGC regulatory directions.

  • The UGC Act, 1956 empowers UGC to: (i) inquire into financial needs of universities, (ii) allocate and disburse grants from central funds, (iii) recommend minimum standards for instruction, examination, and research, and (iv) advise the central and state governments on university education.
  • UGC provides recognition to universities; an institution cannot call itself a "university" unless recognised under the UGC Act or established by a special Act of Parliament/State legislature.
  • The AICTE Act, 1987 governs technical education; NCTE Act, 1993 governs teacher education — each has its own approval and accreditation functions, creating overlapping jurisdictions.
  • National Education Policy (NEP) 2020 explicitly recommended separating regulation from funding and accreditation, and proposed a Higher Education Commission of India (HECI) as the single regulatory body — the VBSA Bill is the legislative implementation of this NEP recommendation.

Connection to this news: The Ministry's clarification that VBSA will retain UGC-style funding acknowledges that the grant-disbursement function is essential for sustaining public universities — but the separation from regulation is designed to end the conflict of interest inherent in the UGC's current dual role.

Separation of Functions: Regulation vs. Funding in Higher Education

The structural problem of combining regulation and funding in a single body is well-documented in public administration: the funder-regulator has incentives to protect institutions it has funded, reducing the rigour of regulatory oversight. Global best practice separates these functions — for example, in the UK, the Office for Students (regulator) is separate from UK Research and Innovation (funder). The VBSA's three-council structure — Regulatory Council, Accreditation Council, Standards Council — with funding moved to the Ministry of Education directly, mirrors this separation.

  • Under the proposed VBSA structure, the Ministry of Education (not the VBSA Commission) will disburse grants to universities — adopting a UGC-like quantum and criteria but removing the disbursal power from the regulatory body.
  • The Regulatory Council will handle approvals, recognition, and monitoring of universities and colleges — functions currently split between UGC, AICTE, and NCTE.
  • The Accreditation Council will oversee accreditation, replacing the National Assessment and Accreditation Council (NAAC) and National Board of Accreditation (NBA) which currently operate under UGC/AICTE respectively.
  • The Standards Council will set academic standards — curriculum frameworks, qualification norms — replacing UGC's standards-setting role.
  • Concerns from Opposition MPs: if the Ministry directly controls both funding and regulatory appointments, centralisation increases; there is risk that universities critical of government policies could face funding cuts or adverse regulatory action.

Connection to this news: The JPC scrutiny reflects a classic tension in governance design: structural separation of functions is theoretically sound, but effectiveness depends on the independence of the new regulatory body from political control — a concern the Opposition is pressing the Committee to address.

Entry 66, Union List and Parliament's Power Over Higher Education

Entry 66 of the Union List grants Parliament exclusive power to "co-ordinate and determine standards in institutions for higher education or research and scientific and technical institutions." This is the constitutional basis for the UGC Act, AICTE Act, NCTE Act, and the proposed VBSA. However, education as a subject was moved from the State List to the Concurrent List by the 42nd Constitutional Amendment (1976), giving both Parliament and state governments legislative competence over education (Entry 25, Concurrent List) — but Entry 66 remains exclusive to Parliament for standard-setting.

  • Entry 25, Concurrent List — Education, including technical education, medical education and universities, subject to Entry 63, 64, 65, and 66 of the Union List.
  • Entry 66, Union List — Co-ordination and determination of standards in higher education; exclusively Parliamentary.
  • The 42nd Amendment (1976) shifted education from Entry 11 of the State List to the Concurrent List — a major centralisation of education governance; several states have historically resisted this shift.
  • State universities are established by state Acts; Central universities by Central Acts (each requires a separate Act of Parliament).
  • The VBSA Bill, by repealing the UGC/AICTE/NCTE Acts and replacing them with a single statute under Entry 66, will not alter the Concurrent List nature of general education — only the standard-setting and regulatory architecture for higher education.

Connection to this news: The concerns about centralisation are rooted in this constitutional structure — if the VBSA effectively gives the Union government greater control over universities established by state Acts (which were previously regulated by state-level bodies in some respects), it could encroach on states' constitutional space under Entry 25 of the Concurrent List.

Key Facts & Data

  • UGC Act, 1956 — UGC established 28 December 1953; statutory from 1956
  • AICTE Act, 1987 — regulates technical education; to be repealed under VBSA
  • NCTE Act, 1993 — regulates teacher education; to be repealed under VBSA
  • Entry 66, Union List — Parliament's exclusive power over higher education standards
  • Entry 25, Concurrent List — Education (general), including universities (Parliament + States)
  • 42nd Constitutional Amendment, 1976 — moved education from State List to Concurrent List
  • VBSA Commission: 12 members, three internal councils (Regulatory, Accreditation, Standards)
  • NEP 2020 — recommended HECI (Higher Education Commission of India) as single regulator; VBSA Bill implements this
  • NAAC — National Assessment and Accreditation Council (under UGC); to be subsumed
  • NBA — National Board of Accreditation (under AICTE); to be subsumed
  • VBSA Bill status as of early 2026: under Joint Parliamentary Committee review