India is currently having over 600 million of its population between the ages of 18 and 35 constituting about 43% of the total population. By virtue of this, India has the largest number of millennials and Gen Zs in the world. This population constitutes critical mass for increasing GER in higher education from current 28% to 50% by 2035 as envisaged in NEP-2020. Moreover, India’s working population in the age-bracket of 15-64 is nearly 68%. Current demographic dividend will not be available for longer period as youth population will turn old and thus will become non-productive. Precisely for this reason, PM Modi called current time-window in the lifespan of Bharat as the Amrut Kaal and has given clarion call for making it Viksit by 2047 through self-reliant measures. This pious vision of the PM can be met with only by empowering youth with the necessary skillset, entrepreneurial mindset and creative thought processes. Skilled youth are in high demand world over and this trend will always remain as skilling, upskilling and reskilling will always be required to cope-up with ever-evolving job profiles in the work places. However, owing to the economic transformation that the nation has witnessed over the last decade, living standard has greatly improved leading to enhanced cost of living. And, education is no exception.
Central Government has taken number of initiatives for ensuring hassle-free access to quality higher education, especially with regard to NEP-2020 implementation. These include multidisciplinary and learning outcome based curriculum for holistic learning; innovative pedagogy (experiential learning, internship, field immersion, etc); evaluation to test the learning outcomes; Academic Bank of Credits; Multiple Entry Exit; Dual degree, joint degree and twin degree programs; emphasis on Indian Knowledge System and Universal Human Values, etc. The latest edition to the long list is PM-Vidyalaxmi scheme to provide collateral free, guarantor free financial loans to needy meritorious students covering all categories to ease them from financial constraints for pursuing quality higher education.
Approved by the Cabinet on 5th November, 2024, as a Deepawali Gift to the nation, PM-Vidyalaxmi is a mission mode, simple, transparent, student-friendly and fully digital mechanism to facilitate easy access of loans to meritorious students admitted in, to begin with, top 860 quality higher education institutions. This initiative provides a single window integrated platform for students seeking educational loans to apply for it and to track their applications.
Covering one lakh students annually, PM Vidyalaxmi will add to the scope and reach of earlier initiatives of the current government for maximizing access to quality higher education for the youth of the economically and socially deprived sections of the society. The list will be updated annually based on the latest NIRF ranking. Under this scheme, students who will be admitted in quality Higher Education Institutions will be eligible to obtain collateral free, guarantor free loan from banks and financial institutions to cover full amount of tuition fees and other expenses to be incurred for pursuing academic programs.
Under PM Vidyalaxmi, government will also provide 75% credit guarantee of outstanding default for loan amounts up to Rs 7.5 lakhs to support banks to expand coverage. The scheme will also provide for 3% interest subvention on loans up to Rs 10 lakh during moratorium period for those students having annual family income of Rs. 8.00 lakhs and are not covered under any government scholarship of interest subvention. This will be in addition to full interest subvention already offered to students with up to Rs. 4.5 lakhs annual family income. Interest subvention will be paid through E-voucher and Central Bank Digital Currency (CBDC) wallets. An outlay of Rs 3,600 Crore has been made available for period from 2024-25 to 2030-31, and 7 lakh fresh students are expected to get the benefit of this interest subvention during the above timeslot.
In fact, PM-Vidyalaxmi will supplement the two components of the scheme of Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP), namely, the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme (CGFS) for education loans, already offered by the Ministry of Education. Under the PM-USP-CSIS, students pursuing technical/professional courses from approved institutions with annual family income up to Rs 4.5 lakhs are already enjoying full interest subvention during moratorium period for education loans up to Rs 10 lakhs.
PM Vidyalaxmi, in a nut-shell, is an entirely new scheme launched for empowering youth, especially of middle class, with necessary financial support for pursuing the education of their choice. The scheme will operate in tandem with PM-USP for providing financial support to all deserving students to pursue quality higher education and technical/professional education in a select quality Higher Education Institutions in India. The newly launched scheme, apart from making quality higher education available to meritorious students, will ease out the impounding stress of students opting for loan and will enable them to fully concentrate on learning. Kudos to PM Shri Narendra Modi and Education Minister Shri Dharmendra Pradhan for launching a new learner-centric scheme for spearheading the implementation of NEP-2020. PM Vidyalaxmi is yet another ‘Modi Kee Guarantee’. It is, in fact, a confluence of Vidya, the Goddess of Knowledge, and Laxmi, the Goddess of Wealth. It is precisely for such welfare measures that the PM Modi is adored by the masses in India and abroad.
The author is Vice Chancellor, Central University of Punjab, Bathinda
