Research funding: New system of individual project accounts hits top institutes

Funding for research projects in public institutions such as IITs, IISERs, IISc, and other universities, is drying up due to a new procedure devised by the government.

The new rules require every institution taking up research projects to open individual zero-balance accounts for each project, according to a Times of India report. These accounts have to be with the bank with which the nodal agency or department banks. The funds are released based on the budget presented and after an invoice is raised. 

Also, the project accounts would have to return any unused funds lying for the project, only after which fresh funds would be disbursed, the report said.

Apart from being tedious, the process has delayed disbursements of funds this year, as confusion prevails, according to several members of the academic community quoted by the daily.

New process tedious

Before this order took effect in March 2022, allocations approved for a financial year were transferred in advance into an institute’s account and spent as needed.

Various government ministries and departments like the Department of Science and Technology (DST) and Department of Biotechnology (DBT) which award research projects to institutes. These institutes have appointed a central nodal agency (CNA) to manage the process.

The Education Ministry has IGNOU, DST has Science and Engineering Research Board (SERB) and DBT has National Institute for Immunology as their CNA or implementing agency. Each CNA had an account through which funds were disbursed to an institute.

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However, now, each project needs to have a separate zero-balance account. So, if an institute takes up 50 projects, it would need to open 50 accounts with the same bank as that of the CNA.

These 50 accounts would be mapped to the CNA’s bank account which, in turn, would be mapped to a government portal known as the Public Fund Management System, for receipts and payments.

Issues with funding process

“PFMS is under development. Institutes are opening accounts but till every institute opens and activates these accounts, funds will not be transferred by the CNA. Since April 2022, there has been very little release of funds,” said the dean (R&D) of a prominent institute quoted by  TOI.

It quoted Distinguished professor, (BHU) and SERB distinguished fellow Professor SC Lakhotia as saying that universities with large numbers of funded projects will face enormous issues with logistics for opening and maintaining so many individual accounts. “I have been requesting my university to open zero-balance accounts for my projects for a month, but that has not happened yet. There may be problems if money is transferred late for a project, say in January. Since the university stops receiving bills for payment by mid-February, the principal investigator may either lose the unspent money on April 1 because of the nature of the account or ‘somehow’ spend the money within the financial year,” he said.

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For large institutes like IITs, more than 300 or 400 accounts would have to be opened as they deal with that many projects.

Funds have also been delayed or not received due to the change in process.

Researchers and institute authorities have also said that this leaves them no elbow room to tackle unbudgeted overheads like support staff or maintenance expenses using interest earned on parked deposits.

Research enthusiasm affected

The operational hassles and added paperwork has affected the enthusiasm for research by “making life difficult”, some faculty of certain institutes told TOI.

“The research ecosystem at our public academic institutes is now unsustainable because the government does not pay us for overheads in projects,” said a senior researcher. “Which means, the institute ends up paying for that.”

A trial run of the new process conducted at IIT Delhi created “a huge crisis”, said another researcher. On any project, an institute typically spends close to 11% for carrying out work, such as administrative cost and water charges. Indian government agencies pay only 5% as overheads when they award a research project. Now, the more research projects universities take on, the more they suffer financially, the researcher added.