Government Approves PM-Vidyalaxmi Scheme for Education Funding

November 7, 2024

The government of India approved the PM-Vidyalaxmi scheme and an important equity infusion into the Food Corporation of India (FCI). These decisions aim to enhance access to quality higher education and strengthen food security in India.

PM-Vidyalaxmi Scheme Overview

The PM-Vidyalaxmi scheme is a new initiative with a budget of Rs 3,600 crore over five years, starting from the fiscal year 2024-25. It targets meritorious students in both private and public Quality Higher Education Institutions (QHEIs). The scheme is rooted in the National Education Policy 2020.

Eligibility Criteria

Students from families with an annual income of up to Rs 8 lakh can benefit from the scheme. They will receive a 3% interest subvention on education loans up to Rs 10 lakh. Importantly, there is no need for collateral or a guarantor.

Loan Application Process

The application process will be entirely digital. Students can apply through a consolidated portal named PM-Vidyalaxmi. This portal will facilitate access to education loans and interest subvention from various public and private scheduled banks.

Expected Impact

The scheme aims to assist over 22 lakh students annually. It will provide education loans for those enrolling in the top 860 prestigious higher education institutions across India. The funding allocated will span from 2024-25 to 2030-31.

Complementary Schemes

The PM-Vidyalaxmi scheme will work alongside existing initiatives like the Central Sector Interest Subsidy (CSIS) and the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). Under CSIS, students from families earning up to Rs 4.5 lakh will continue to receive full interest subvention on education loans during the moratorium period.

Equity Infusion in the Food Corporation of India

The Union Cabinet also approved a Rs 10,700 crore equity infusion for the Food Corporation of India (FCI) for the financial year 2024-25. This funding is intended to support FCI’s working capital needs.

Purpose of the Equity Infusion

The infusion aims to reduce FCI’s reliance on short-term borrowings. This reduction will lower interest burdens and ultimately decrease government subsidy expenditures. FCI’s authorised capital has increased from Rs 10,000 crore to Rs 21,000 crore.

FCI’s Role in Food Security

FCI plays a crucial role in India’s food security. It procures food grains at Minimum Support Prices (MSP), maintains strategic stocks, and distributes food for welfare measures. The government’s food subsidy has increased, amounting to Rs 21.56 lakh crore from 2014 to 2024.

The PM-Vidyalaxmi scheme and the equity infusion into FCI are steps towards improving higher education access and ensuring food security in India. These initiatives reflect the government’s commitment to supporting students and stabilising the food market.

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