18. UGC Act: Section 15 – bharatlex-rinkutai.com

18.1 Bare Act Provision

15. Payment to the Commission.— The Central Government may, after due appropriation made by Parliament by law in this behalf, pay to the Commission in each financial year such sums as may be considered necessary for the performance of the functions of the Commission under this Act.

18.2 Explanation

Under section 15 of the University Grants Commission Act it is the Central Government which finances the Commission after due appropriation is made by the Parliament.[1] It explains how the UGC gets its money to operate. The Central Government can give money to the UGC every financial year. This money is paid only after Parliament approves and allocates it through a proper law or budget. The amount given is whatever the government thinks is needed for the UGC to carry out all its duties and functions under the Act, such as coordinating university education, maintaining standards, giving grants to universities, inspecting them, and more.

Basically, this section ensures that the UGC’s funding comes from the national budget i.e. taxpayers’ money via Parliament, and it’s not automatic. It requires parliamentary approval each year to cover the Commission’s operational and grant-giving expenses. This keeps the UGC financially dependent on the government while aligning with democratic control over public funds. Thus Section 15 of the UGC Act, 1956, establishes the Financial Lifeline of the Commission.

18.3 Critical Analysis

Procedural Delay: The flow of funds from the treasury to the UGC is governed by strict constitutional and budgetary cycles, which often result in significant timing gaps, although it is yearly cycle. The provision clearly refers to the passing of the Appropriation Act following the Union Budget. This means the UGC’s liquidity is strictly tied to the legislative calendar. If the budget is delayed or if a Vote on Account is passed, the Commission often faces a temporary freeze in starting new schemes or disbursing development grants. Even after Parliament approves the funds, the Ministry of Finance typically releases money in quarterly installments. Universities often complain that by the time the UGC receives its installment and processes individual university claims, the academic year is halfway through. Such incremental fund release hampers the long-term planning of educational research, in case of UGC.^[2] While not explicitly in Section 15, the due appropriation is contingent on the UGC proving it spent previous funds. The delay in collecting Utilization Certificates from hundreds of universities often prevents the UGC from claiming its next installment from the Central Government in a timely manner.

Constitutional Validity and Ultra Vires: Section 15 is the statutory implementation of the financial powers of the Union under the Constitution of India. This section is constitutionally grounded in Article 266 i.e. Consolidated Fund of India and Article 114 i.e. Appropriation Bills. It ensures that no money is withdrawn for the UGC without the explicit Law passed by Parliament. The section states the Government may pay such sums as considered necessary. This gives the Executive branch i.e. Ministry of Finance and Ministry of Education significant discretionary power. Thus the state has a duty to promote education, but the quantum of funding is a policy decision and not a fundamental right that can be enforced through a Writ of Mandamus. If the Central Government attempts to bypass Section 15 by funding universities directly for matters specifically under the UGC’s domain, it could be argued as a violation of the statutory scheme of the UGC Act.

Room for Misinterpretation: The simplicity of Section 15 conceals a lack of defined criteria, leading to administrative ambiguity. The Act provides no formula for necessity. This allows for misinterpretation and political volatility. Funding for the UGC can be slashed or increased based on the shifting priorities of the ruling government rather than the actual academic needs of the country’s universities. There is often a lack of clarity on the ratio between Administrative Expenditure such as salaries and overheads of the UGC and Programmatic Expenditure i.e. grants to universities.^[3] There is often misinterpretation regarding whether the Central Government can route funds to the UGC for purposes outside the 1956 Act.

Colonial Era Policy and Irrelevance: Section 15 is a classic example of the Annual Budgetary Model that dates back to the British Financial Resolution of 1870. Under the colonial model, the Grants-in-Aid system was designed to keep institutions dependent on the Crown’s annual approval. Section 15 maintains this; the UGC has no independent Endowment Fund or Sovereign Wealth. It must beg Parliament every year. This prevents the Commission from making 10-year or 20-year strategic research bets. Inherited from British accounting, if the sums paid under Section 15 are not spent by March 31st, they lapse. This leads to the March Rush, where the UGC and universities spend money hastily and often inefficiently at the end of the financial year to ensure their next year’s budget isn’t cut.^[4] Relying on an annual appropriation is increasingly viewed as an obstacle to creating world-class universities, which require long-term, predictable capital.

[1] Mohd. Khan Durrany (Dr.) v. Principal (Tulsi Ram) Shivaji College, [ILR1970DELHI414]

[2] “Strategy for New India @ 75” NITI Aayog, November 2018

[3] “General Financial Rules, 2017”, Ministry of Finance Department of Expenditure

[4] “An Analysis of Inefficient Allocation and Expenditure in the Education Budget”, Dipika Jaiswal, Enakshi Sharma, Nayantara Nath & Shreyes Shekhar, Researching Reality Summer Internship 2014, Working paper: 334.