The Hindu Business Line : Leave the IIMs alone

It would be dangerous to dismiss the huge fee cut at the prestigious IIMs by the HRD Minister, Mr Murli Manohar Joshi, as a mere election ploy. That would have been comparatively harmless. It is time the academic community managing such institutions of excellence tells the government firmly that it is capable of managing its own affairs without doles from the government, says Rasheeda Bhagat.

Dr Murali Manohar Joshi, Minister for Human Resources Development... More than meets the eye?

IT IS quite a paradox... Oliver does not want more. In fact, he is being offered more, but he is saying, ``No thank you.''

This is the piquant situation pertaining to the Human Resource Development Ministry coming out with a sudden executive order slashing fees at the prestigious Indian Institutes on Management. Thanks to the largesse from the HRD Minister, Mr Murli Manohar Joshi, who anyway does not believe in half-hearted measures, the cream of the management student fraternity — the much-envied IIM students — will now have to pay only a fifth of their fees.

Was this gesture an extension of the feel-good factor created by Corporate India and further strengthened by the Finance Minister's mini-Budget handing out one dole after another to various sectors? Whatever it was, one fine morning the annual fees for IIMs had been slashed from Rs 1.5 lakh to Rs 30,000.

No Indian tax payer, toiling year on year, and wondering why roughly one-third of his/her hard-earned money, which could be used for so many essential requirements of the family, should go into the Government's tax kitty, would have welcomed this news.

A look at the contours of this peculiar development. Forget the millions living below the poverty line; there are any number of sectors clamouring for some help from the government. All that they require is a helping hand and not necessarily a dole.

For example, the Bharatiya Yuva Shakti Trust (BYST) founded by the dynamic Ms Lakshmi Venkatesh, a professional who threw up a lucrative career in the US to return to India to start an enabling service for young entrepreneurs. This is an organisation that makes no difference between a post-graduate and a school dropout. If the person has a good business idea or model and is willing to work hard, the BYST finds both the mentor and the finance to help the individual. Thanks to the handholding by the BYST and constant counselling and monitoring by the experienced mentor, herself an entrepreneur, the BYST has produced entrepreneurs, many of them women, who have managed to take their enterprise's annual turnover to the magic figure of Rs 1 crore.

These entrepreneurs employ 10, 20, 40 or even more people, but Ms Venkatesh regrets that the banks just refuse to lend even to entrepreneurs with a good business model and a proven track record of three years, without demanding collateral. "Instead of telling such entrepreneurs: `You have a track record, you have built assets and have a good credit history with the BYST, so now we will help you expand', the banks tell them: `You want a loan of Rs 5 lakh, give us a collateral of Rs 15 lakh'.''

Even when it comes to the micro-credit model, for giving loans to women's self-help groups across the country, where the repayment rate has been excellent, most banks have been watching the show from the sidelines. Mind you, they are not asking for subsidies or doles, all they need from the PSU banks is a helping hand, and monitoring which requires some trust in the concept of the rural poor being intrinsically more honest than many corporates which have swelled the bank NPAs.

But instead of helping such needy sectors, the HRD Minister has for some reason been saying from public platforms that the elitist nature and high fees charged by the IIMs have confined the reach of these institutions to only the rich students. His argument is that students from poorer families do not even aspire to write the entrance exam because the fee is so steep. And, hence, the reduction, we are told.

Strangely enough, the board of governors, the faculty and the students, at least of the best the IIMs — the one in Ahmedabad — have come out to spurn this subsidy. Students of IIM-A have been quoted in the media as saying that even those students whose parents cannot afford to pay the annual fee of Rs 1 lakh, have no problem in raising the amount through bank loans.

According to one such student, "The very letter accepting our application and inviting us to join an IIM is sufficient to get us loans from banks without any collateral." Another said , "No student was refused admission to III-A for his/her inability to pay the supposedly high fees".

It comes as no surprise to anybody that the banks are falling over one another to finance the education of the IIM students, secure in the knowledge that even before they finish their course, corporates lining up at the campuses year after year would grab the talent that is being harnessed and nurtured at these institutes.

Mr N. R. Narayana Murthy, the Infosys chief and chairman of the board of governors of IIM-A, has termed Mr Joshi's decision to slash the fees of IIMs as "unfortunate and ill-advised". One could spot him at quite a few television channels saying politely but firmly that the HRD Ministry cannot take such a decision. That is the prerogative of the IIM board of governors.

He wondered why and how, despite his having given all the data to the HRD Minister, such a decision had been taken defying "logic and reason". In one TV interview he said that by taking such a step, the HRD Ministry had exposed itself to the justifiable criticism that it was "robbing the poor to pay the rich."

Prof P. V. Indiresan, former Director, IIT Madras, does not find the slashing of fee justified at all. "IIM graduates get jobs with such fat salaries that they do not deserve any charity, particularly to be paid out of tax contributions of much poorer people." He does not think that equity is the real criterion behind this move. "If it is, indeed the criterion, then why should there be a single fee for all students, irrespective of whether they are poor or rich," he asks. He also points out that in the US, higher education is subsidised, except for an MBA degree, where the full fee is charged.

This is borne out by the fact that while scholarships are available in American universities even for foreign students, for engineering and other technical courses, apart from the arts courses, there is hardly any scholarship or waiver of tuition fee available for an MBA course. The reason, of course, is that MBA graduates find it easy to get well-paying jobs and parents who send their wards to the US or the UK for an MBA programme are willing to dish out steep fees which can go even upward of Rs 50 lakh.

Mind you, the IIM-A has been ranked by no less than The Economist on a par with some of the best business schools in the world, so comparatively speaking, the fee it charges at Rs 1.5 lakh a year, is only a fraction of that charged by the best B-schools of the world.

Obviously, there is a catch in the government's sudden concern for IIM students. Says Prof Indiresan, "More than the fee structure, the authoritative manner it has been done is the cause for worry. We should follow the adage that if it ain't broke, do not fix it. If you want to improve higher education, go to poorly performing universities, not the very best."

So what could be the motive behind the fee-slash move?

For long the IIM boards have fiercely guarded their independence and their autonomy, and that is one of the most important reasons why an IIM-A graduate can compete with the best in the business. Whether in terms of facilities, including the ambience at the campus that stimulates thinking and creativity, quality of teaching, or faculty, both domestic as well as international, it is able to provide the best. This it is able to do because no mantriji or babu mahodai can tell the board what it can or cannot do. Did this rankle?

For the time being, the debate will continue to rage on this sudden largesse from the government. It would be dangerous to dismiss it as a mere election ploy. That would have been comparatively harmless. It is time the academic community managing such institutions of excellence tells the government firmly that it is capable of managing the affairs of the seats of learning without doles from the government.

Or else, the next we will hear on the issue will be that the course material will be redrafted to include Mr Joshi's pet peeves, not the least of which was rewriting our history textbooks.

Response may be sent to rasheeda@thehindu.co.in

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