The Section 8 firm, which is expected to help in bringing funds for the company, is in its final stage of formation, said Delhi University's Vice Chancellor Yogesh Singh.
Going by definition under the Companies Act 2013, a Section 8 firm is registered for not-for-profit objectives and prohibits payment of any dividend to its members.
"We have set up one company to encourage new startups and innovation in the varsity and we are in search of its CEO. The company will work on incubators and promote innovation," Singh said.
He further said that the second company, which is in its final stage, would ensure funding from alumni and other firms under their Corporate Social Responsibility (CSR) activities.
The Section 8 company will be an independent entity of Delhi University and will have a professional CEO. The funding will be used for developing the university infrastructure and other facilities.
Along with banking on the alumni and CSR activities of business firms for funding, DU is also planning to get a loan of ₹1,000 crore from the Higher Education Funding Agency (HEFA) for infrastructure development and creation of capital assets.
In its loan proposal to the Ministry of Education, the university has mentioned about the meagre amount of allocation it receives for the creation of capital assets for the last three to five years. The shortage of funds has also affected varsity's ability to purchase lab equipment and maintain infrastructure.
"We are waiting for the HEFA (Higher Education Financing Agency) loan. Moreover, we are hopeful that these two companies will help in the generation of funds. We are hoping that alumni will contribute and CSR activities of the companies will help in generation of funds," he said.
The HEFA loan is under process and Yogesh Singh is hopeful that it will be cleared soon. The globally acclaimed university recently received a loan of over ₹1,000 crore from its executive council. According to the HEFA funding pattern, DU will have to repay the loan in 20 half-yearly installments in 10 years.
With inputs from PTI
