Modern global universities rely on Endowment Funds that are shielded from government interference. Section 16 is archaic because it treats the UGC as a pass-through entity for government cash rather than a wealth-generating trust that can sustain higher education through economic downturns.
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.
his section is a direct descendant of the Wood’s Despatch (1854) system, where the British government used financial aid to ensure that private and local institutions remained ideologically and administratively aligned with the Crown’s interests.
In a colonial context, this was to prevent subversive or low-quality education; in 2026, it is seen as a violation of academic autonomy.
Colleges recognized under Section 12B of the UGC Act 1956 are eligible for central assistance. This section ensure that colleges meet certain standards of academic and infrastructural quality, allowing them to receive financial grants for development projects, research activities, and capacity building.
The phrase “all other relevant factors” under Sub-section (2)(d) allows the UGC to include almost any criteria in its fee regulations, which can lead to regulatory creep where the Commission starts dictating internal university budget allocations under the guise of fee regulation.
Clause (b) examines the types of activities or professions graduates will engage in, like medicine, engineering, or teaching, where public safety or quality matters.
This fragmented funding model leads to institutional stagnation, where universities wait years for grants while inflation erodes the value of the allocated funds.
The UGC can advise universities under Section 12(j) to take necessary steps for improving university education and recommend actions for implementing such advice.
The words “all such steps” are of wide import. The steps referred to in Section 12 may include issuance of guidelines, directions, circulars etc. Hence the Guidelines issued in exercise of statutory powers, thus, cannot be said to be non-statutory.
