New Delhi: Education experts and academics have raised serious concerns over the proposed Viksit Bharat Shiksha Adhishthan (VBSA) Bill, 2025, warning that it could significantly worsen funding inequities in India’s higher education system and marginalise state, regional and rural universities. They argue that the bill’s design risks favouring already well-resourced institutions while pushing weaker universities into a cycle of underfunding, compliance-driven functioning and stagnation.

The VBSA Bill was introduced in the Lok Sabha on December 15 and referred to a Joint Parliamentary Committee the following day. If enacted, it would fundamentally restructure higher education governance in India by repealing three major laws — the University Grants Commission (UGC) Act, 1956; the All India Council for Technical Education (AICTE) Act, 1987; and the National Council for Teacher Education (NCTE) Act, 1993 — and dissolving the bodies established under them. In their place, the bill proposes a single overarching regulator, the VBSA Commission.

Under the proposed framework, a 12-member VBSA Commission will oversee and coordinate the work of three distinct councils: the Regulatory Council (Viksit Bharat Shiksha Viniyaman Parishad), which will authorise institutions to award degrees; the Standards Council (Viksit Bharat Shiksha Manak Parishad), which will define learning outcomes, curriculum benchmarks and faculty qualifications; and the Accreditation Council (Viksit Bharat Shiksha Gunvatta Parishad), which will design and monitor the accreditation and quality assurance framework.

While the government has described the bill as a move towards simplification, transparency and accountability, critics argue that its approach to funding and regulation could have unintended and far-reaching consequences. One of the most contentious aspects of the bill is that, unlike the UGC, the VBSA framework does not include a dedicated grants council. This omission is particularly striking because the National Education Policy (NEP) 2020 had explicitly envisaged a separate funding body within the new regulatory architecture to ensure equitable and needs-based disbursal of public funds.

Instead, the VBSA Bill states that grants will be disbursed “through mechanisms devised by the Ministry of Education,” with funding decisions guided primarily by the Regulatory Council’s “feedback on institutional performance.” Experts fear this linkage between regulatory assessment and funding could institutionalise inequality rather than correct it.

“Accreditation, ratings and rankings are not neutral tools,” said Anurag Shukla, an education expert who teaches across institutions including the Tata Institute of Social Sciences. “They measure outputs and proxies for capacity such as faculty strength, research publications, digital systems, governance processes and internationalisation. These indicators reflect accumulated advantages. When funding follows regulatory feedback, universities that already have resources will continue to get more, while institutions in rural or underserved regions will be penalised for constraints beyond their control.”

According to Shukla, such a system risks encouraging optics-driven compliance rather than genuine capacity-building. Universities may focus on ticking boxes to satisfy regulators instead of investing in locally relevant teaching, research and community engagement. Over time, this could lead to a stratified public university system, with elite, well-funded institutions on one end and chronically under-resourced state universities on the other.

Former UGC chairperson Sukhadeo Thorat echoed these concerns, drawing on his experience at the commission between 2006 and 2011. He noted that during his tenure, the UGC had introduced multiple schemes specifically aimed at supporting universities in rural and backward regions, recognising that they faced structural disadvantages in terms of infrastructure, faculty availability and student preparedness.

“The VBSA funding mechanism will result in disparity among institutions,” Thorat said. “Well-developed universities will meet regulatory requirements more easily and therefore receive more funds. Institutions in rural and small-town areas, which need special support, will not get adequate funding and will continue to lag behind.”

The timing of the proposed overhaul has added to the anxiety within academic circles. Over the past decade, direct public funding for higher education has increasingly been supplemented — and in some cases replaced — by loans from the Higher Education Financing Agency (HEFA), introduced in 2017. While HEFA was designed as a means to support infrastructure development, critics argue that it has pushed institutions towards greater dependence on internal revenue, primarily student fees.

As of December 2024, HEFA had sanctioned loans worth ₹43,028.24 crore but disbursed only ₹21,590.58 crore. A review by the National Institute of Public Finance and Policy (NIPFP) covering the period between July 2022 and January 2023 found that, on average, 78% of the internal revenue of institutions that availed HEFA loans came from student fees. The report also noted that the Ministry of Education had advised some institutions to raise fees to ensure loan repayment — a move critics say undermines the principle of affordable public education.

Funding pressures are also evident in technical education. Data shared with the Rajya Sabha show that central government grants to AICTE fell sharply from ₹420 crore in 2022–23 to ₹137.5 crore in 2024–25, a decline of 67% in just two years. AICTE’s expenditure on student scholarships also dropped during this period, from ₹344.81 crore to ₹309.48 crore.

State universities, which educate a majority of India’s students and rely heavily on public funding, fear they will be the biggest losers under the VBSA framework. Currently, eligible state universities receive financial assistance from the UGC under Section 12(B) of the UGC Act. In addition, the Ministry of Education runs the Pradhan Mantri Uchchatar Shiksha Abhiyan (PM-USHA) scheme to support NEP-related reforms in state institutions, with an approved outlay of ₹12,926.10 crore for 2023–26. However, actual expenditure in 2024–25 was reportedly around 51% lower than the budgeted allocation, and the ministry has indicated in Parliament that any extension of the scheme will depend on multiple factors.

Faculty members at state universities say they are already operating under severe financial stress. Sanjay Chaudhary, a faculty member at Dr Ram Manohar Lohia Avadh University in Ayodhya, Uttar Pradesh, said his institution receives minimal funding from both the UGC and the state government. “Even teachers’ salaries depend partly on funds raised through alumni contributions and industry collaborations,” he said. “Now the ministry is saying funding will depend on feedback from the VBSA regulatory council. Universities like ours will not get good feedback because we don’t have the resources to meet those benchmarks in the first place.”

Despite these criticisms, education ministry officials and some private university leaders have defended the bill. A senior ministry official said the grants disbursal process under VBSA would be “similar to or better than existing mechanisms” and argued that linking funding to performance would ensure transparency and public accountability.

Vineet Joshi, Secretary in the Department of Higher Education, said the VBSA framework would decentralise authority rather than centralise it. Speaking at the HT Future-Ed Conclave on December 19, he said institutional autonomy would be linked to performance, particularly student outcomes, and that institutions themselves would be responsible for declaring accurate data.

Some leaders of well-resourced institutions have also welcomed the changes. Prof R.B. Jadeja, Provost of Marwadi University in Rajkot, said the VBSA framework rewards research-ready and well-accredited institutions. IIT Kharagpur Director Prof Suman Chakraborty supported bringing premier institutions like the IITs under the new regulator, arguing that they should not remain outside the common framework. On funding concerns, he said older IITs were unlikely to rely excessively on HEFA loans, instead using a mix of government support, loans and endowments.

However, critics insist that without a strong, independent grants mechanism explicitly designed to support disadvantaged institutions, the VBSA Bill risks entrenching existing hierarchies in Indian higher education. As the Joint Parliamentary Committee begins its scrutiny of the legislation, many academics hope that concerns around equity, funding and regional balance will be addressed before the bill becomes law.