The Telegraph
Since 1st March, 1999
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IIM cuts off Delhi purse strings
- Ahmedabad institute declines grant amid autonomy battle

Ahmedabad, Dec. 28: The freedom movement has started from Ahmedabad.

The Indian Institute of Management, Ahmedabad, has decided to politely decline the annual central government grant of Rs 10.5 crore, a step that observers interpret as the first move towards ending reliance on Delhi.

A meeting of the board of governors yesterday approved the budget for the coming year, which contained the decision to not accept the money.

The board is studded with industry who’s who — Infosys chairman .R. Narayana Murthy heads it. ICICI managing director K.V. Kamath and Hindustan Lever chairman M.S. Banga are members. Representatives of the Centre and the Gujarat government were not present at the meeting.

The decision, which the institute has yet to communicate to the human resource development ministry which is its overseer, comes in the backdrop of a running battle with Delhi. Murli Manohar Joshi’s ministry has been seeking to thrust down the throats of the six institutes of management a memorandum of understanding that is seen as an attack on their autonomy.

Under the draft agreement, the IIMs will have to virtually surrender academic, administrative and financial freedom.

“It required us to seek government permission to introduce new courses. In a world where things are changing every second day, one doesn’t want a situation where the government decides curriculum,” an IIM official said.

The dispute over the draft was followed by the alleged leak of the question paper for the common admission test the IIMs hold. Yesterday’s board meeting was the first since the leak fiasco with Joshi unilaterally ordering cancellation of the examination.

Although the decision can be interpreted as the institute telling Joshi “we don’t need your money”, the IIM is politely saying that its income is more than the recurring annual expenditure the Centre meets. IIM Ahmedabad has Rs 98 crore in its kitty, built up from its own earnings.

“So, where is the need for the grant'” said a senior official.

“We want the Centre to utilise this money in some other projects and our decision is not confrontational, rather a sign of large-heartedness,” he said.

He was not sure, however, if the ministry would take it in that spirit.

The decision to decline the money was taken after several days of discussion among faculty members. After a cost-benefit analysis, they were unanimous on declaring financial independence. “We also worked out our financial projections for the next five years. It’s true that it will be a bit difficult without government grant and, according to our estimates, we will have a shortfall of around Rs 12 to 15 crore. But we can bridge the gap and are preparing ourselves for that,” said an IIM official.

It is unlikely that the ministry will just roll over and accept the IIM’s refusal. “The government may reject the decision. And the absence of both the government representatives in the meeting is a clear indication that the ministry has other plans up its sleeve,” the official.

The IIM might cite what Joshi had said while questioning the institutes’ fee structure. He had questioned why they needed government grant when they were charging each student Rs 1.5 lakh a year for two years.

Joshi proposed cutting the fee to Rs 50,000 and freezing the funds the IIMs have of their own at Rs 25 crore.

IIMs have four major sources of income — fees from the main management course and from executive development programmes, consultancy and interest on their own accumulated earnings.

Ahmedabad, Bangalore and Calcutta — the ABC of Indian management education — are the richest IIMs and have been the most determined to fend off what they consider Joshi’s attack on their autonomy.

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