Shimla: Known as India's oldest all-women college, St. Bede's in the Himachal Pradesh capital is contemplating closure due to a severe funds crunch.

"We are facing severe financial crisis and we are not in a position to run the college too much longer," college principal Molly Abraham told sources onWednesday.

The college has been imparting quality education since 1904 and boasts of alumni like actress Preity Zinta, late model and beauty queen Persis Khambatta and Himachal Pradesh's first woman police officer Satwant Atwal.

"The state government is not cooperating with us any more. You see, our fee structure is on par with other private colleges, but the government has cut grants by half," she said.

With a change in government rules in March this year, grant-in-aid to private colleges, including St. Bede's, was reduced from 95 percent to 50 percent.

Earlier, only four colleges were getting the grants and now the total grant is distributed among 20 colleges in the state.

"We are helpless as we are bound by a 2006 high court ruling which directs us to disburse the grants among all private colleges on an equal basis. Earlier, only four colleges were getting the grants. Now the funds are distributed among 20 colleges," education secretary P.C. Dhiman said.

But Abraham was not convinced with Dhiman's reply.

"Since we are not keen to increase the fees as this goes against our objective of providing affordable education to girls, it's better to shut the college," said Abraham.

"Since March we have been managing our routine affairs like payment of salaries to the staff by raising loans, but you tell me, for how many months can this process continue?" she asked.

It charges a monthly fee of Rs.50, fixed in 1970, from the students of undergraduate art courses. It's the only college in the state that has been given A plus grade by the NAAC.

"It is a strange paradox that on one hand the government is providing free education to girls in government-run colleges and on the other it has squeezed our grants," Abraham lamented.

"Now the ball is in the government's court... otherwise it will be the end of an era," she said.

Pratibha Singh, wife of former chief minister Virbhadra Singh who studied at St. Bede's, said if the college closed down, it would be a disaster. IANS