SRINAGAR: The Government of India has clarified that it no longer offers scholarships under the Padho Pardesh scheme to minority students for pursuing higher education abroad. Responding to a question in the Rajya Sabha, Minister of Minority Affairs Kiren Rijiju stated that the Padho Pardesh scheme, which earlier provided interest subsidies on education loans for overseas studies at Masters, MPhil and PhD levels, was discontinued in 2022-23. The decision was taken as educational loans are now available at lower interest rates through other government interventions.
Instead, the responsibility of financing international higher education for minority students has shifted to the National Minorities Development & Finance Corporation (NMDFC), a government undertaking under the Ministry. Through its education loan scheme, NMDFC continues to provide financial assistance to minority students pursuing technical and professional courses abroad, with a maximum course duration of five years.
The scheme operates under two credit lines. Under Credit Line-1, families with annual income up to Rs 98,000 in rural areas and Rs 1.20 lakh in urban areas are eligible to avail loans of up to Rs 30 lakh at an annual interest rate of 3 percent. Under Credit Line-2, which was introduced to increase outreach, the income ceiling is Rs 8 lakh. Male students are charged 8 percent interest, while female students benefit from a concessional rate of 5 percent.
Eligibility criteria include belonging to one of the six officially recognised minorities—Muslims, Christians, Sikhs, Buddhists, Parsis and Jains—an age range of 16 to 32 years, and confirmed admission to a recognised institute abroad. Preference is given to female and physically challenged applicants, and final selection is made strictly on merit. Loans may also be sanctioned in anticipation of admission.
The NMDFC’s education loan is part of its larger term loan scheme. Each year, 20 percent of the funds allocated to State Channelizing Agencies (SCAs) under the term loan category can be earmarked for education loans. Of this, half is reserved for fresh applicants, while the other half services ongoing loans.
For the financial year 2025-26, NMDFC has a loan disbursement target of Rs 750 crore, of which Rs 375 crore is assigned to the term loan category. Consequently, Rs 75 crore—20 percent of the term loan budget—may be utilised by states to finance education loans for minority students studying abroad, subject to field-level demand.
