In a letter to Prime Minister Narendra Modi, the text of which was released to the media here, Palaniswami said: "The Government of Tamil Nadu is of the view that the existing institutional arrangement of the University Grants Commission (UGC) with both regulatory and financial powers is functioning well.
"There is no need to disband the UGC and replace it with Higher Education Commission of India with only regulatory powers."
According to the Chief Minister, the UGC at present is entrusted with the responsibilities of maintaining, monitoring and improving the standards of teaching and research in Higher Educational Institutions.
It also has the power of sanctioning funds under various schemes, which has been in vogue since 1956 without any complaints.
"The UGC has the required capacity for objective evaluation of the proposals received and sanction funds in a transparent manner," he said.
Palaniswami expressed Tamil Nadu's strong reservation and apprehension to the proposed draft bill under which the financial powers are proposed to be transferred to the Ministry of Human Resource (MHRD) or some other body.
He said based on Tamil Nadu's experience, the sanction of funds objectively based on merits has not been very positive by various ministries of the Government of India.
"Further, if this financial power is taken over by the MHRD, we apprehend that the funding pattern would change from 100 per cent funding to 60:40 ratio between Government of India and the State Government," he added.
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