The Cabinet on Thursday approved an ad hoc grant of Rs 145.5 crore over and above the Block Grants to seven IITs and IISc Bangalore to meet their deficits in 2007-08. However, the Government would release only Rs 73 crore this year and the remaining Rs 72.5 crore would be released next year. The additional grant is aimed at restoring the financial health of these institutions.

The move comes in the backdrop of the IITs and the IISc experiencing a deficit of nearly Rs 70 crore over and above the Block Grants of over Rs 500 crore made available to them in 2006-07.

The Cabinet also decided to set up a high level committee to revise the Block Grant scheme for the IITs and the IISc in a “rational manner,” well ahead of scheduled revision after 2010-11.

The committee will be asked to submit its recommendations within four months, sources said. Once the Government accepts it, it would terminate the existing grant scheme. The panel will look into issues related to norms for revenue generation, assessment of accumulated deficits, ways for eliminating it and recommend a formula to allocate annual grants, which should be fixed for the remaining four years of the Eleventh Plan.

The revision was necessitated by the fact that the allocation amount has been stagnant since 2002-03 despite 29 per cent increase in student intake during the subsequent five year period. The situation had become more acute in the wake of Government’s directive last year to increase the seats for post-graduation and research by 50 per cent to compensate for the proposed OBC reservation in higher education.