The Telegraph
Since 1st March, 1999
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- The IIM fee-cut and some finer distinctions

It is possible to take a simple view of the controversy about the fee-cut in the Indian Institutes of Management. The ministry of human resource development of the government of India issued an order on February 5, 2004, asking all the six IIMs to charge the students of their post-graduate program- me the prescribed fee of Rs 30,000 per year. This order has led to controversy, and so have the statements that the HRD minister, Murli Manohar Joshi, has made from time to time. The argument advanced is that the IIMs are set up and financed by the government of India and the HRD ministry is within its right to issue such an order.

The substantive argument in favour of the fee-cut is that this cut will promote technical education and make it affordable for capable but poor students. It is this simple view that is advanced by Y.C. Deveshwar, chairman of the IIM Calcutta. In the resolution that he issued on April 6, 2004, he takes the view that the government order may be implemented in the belief that it is binding on the institute.

The matter is not as simple as it appears. The faculty council of the IIMC has argued through a resolution issued on April 7, 2004, that the resolution framed by Deveshwar already causes infringement upon the authority of the board. If it is granted that the government can issue orders unilaterally, and that these orders are binding, then what remains within the authority of the board and other constituents of the institute' As far as the assurance of financial safeguard is concerned, to which he refers, it is difficult to take such an assurance seriously when it is noted that the finance minister, Jaswant Singh, has just said that the HRD ministry has not sought additional grants for the IIMs. Indeed, his ministry has reduced fund allocation for the IIMs by 40 per cent in the interim budget. During the financial year 2003-04, the HRD ministry did not release any grant to the IIMC in spite of the commitment made by it. It is well known within the IIMs how negative sudden changes in funding pattern may be if these changes are not backed by the ministry of finance.

The issue of making management education affordable has been widely discussed. Thus, in a position paper, “IIMC: Some Concerns About Its Future”, that the faculty council issued in March 2004, it is pointed out that over the entire period 1991-2003, when the fees were revised upward, there was no marked change in the parental background of students taking admission. It is true that students from weaker sections are not represented well, but in this respect the problem does not lie with the fees. It is possible for students at the IIMs to take loans without any difficulty in view of their anticipated incomes. In a society which has not yet taken its responsibility for basic education seriously, if the concern for weaker sections has to go beyond rhetoric then sustained effort needs to be made to reduce illiteracy and offer good basic education to all. The remedy lies in expanding the scope of good education and making it possible for more students from weaker sections to reach the level required by the IIMs.

There is a need for discussion on these points between different parties which has not yet taken place. Joshi makes statements at different places, the HRD ministry issues orders, a faculty council such as that of the IIMC presents papers and makes ineffective pleas for an exchange of views with its chairman and the board. No policy document on the issue has come out of the HRD ministry. Apart from the faculty of the IIMC, position papers have been presented by the faculty of the IIM, Ahmedabad, and of the IIM, Bangalore, but no attempt has been made to engage with these papers seriously. It is proving difficult to make the ministry understand that an order must follow a policy, and a policy is not a populist statement, but a reasoned argument that assesses different options and their implications.

Some other distinctions need to be made if we do not want our minds to be confused and our actions misdirected. It is argued that the IIMs are elitist and in the democratic atmosphere of the country, heightened at the time of the elections, this is supposed to be obviously wrong. Now, a distinction needs to be made between elitism of social privilege and excellence defined by merit. Elitism of social privilege derives from a privileged class or caste or any other such group. Excellence defined by merit is open to all and is based on demonstrated achievement. It is true that poverty and illiteracy prevent many persons from realizing their potential. The answer lies in removing these barriers for them, not in reducing the standards. Higher education should be directed towards excellence not towards mediocrity.

Yet another distinction needs to be made in terms of different types of organizations. The argument in favour of the government runs as follows. If a person or an agency funds an organization then it owns that organization; therefore, the voice of the owner needs to be heard. That this is not right can be shown by means of a simple example. Two persons may start and fund a trust but once the trust is registered they don’t “own” it in the manner in which they own their personal property. Henry Mintzberg, a leading management specialist, has written an interesting article in the Harvard Business Review (1996) on this point. He sees the advantage of a balance between different organizations in Western society. These are identified as privately-owned organizations, publicly-owned organizations, corporatively-owned organizations, and what he calls non-owned organizations controlled by boards of directors. As examples of the last kind, he mentions non-governmental organizations, many universities (including Friedman’s University of Chicago), charity organizations, and others. It is clear that the IIMs are “non-owned” in this sense.

What is the function of an organization like the IIM' In the editorial of this paper, “All for a fee” (April 8, 2004), attention has been drawn to an interesting distinction: public interest and government interest. It has been argued that they do not always converge. A public institution like the IIM is supposed to serve public interest. It is the responsibility of all concerned, starting with the chairman and the board of governors, to uphold this interest. In the event of any conflict between the two, it is expected that public interest be held as paramount. If the founding fathers who established these institutions wanted them to be run by government orders they would not have set them up as autonomous bodies and registered them under the Societies Registration Act.

To whom are these organizations accountable then' Here again some fine distinctions need to be made. The accountability of such organizations needs to be defined in terms of institutional accountability, not accountability to an individual. For ascertaining institutional accountability, it is important to consider whether institutional mechanisms are in place, such as annual reports, audited accounts and so on. Another distinction to keep in mind is that the accountability of an organization like the IIM has to be towards multiple agencies such as students, parents, employers of students, society at large, and so on. The teachers of an IIM, for instance, must be accountable, among others, to their students, to the faculty as a body, and to disciplinary or professional bodies to which they belong.

Education is a precious resource in any society, more so in modern society driven by knowledge. The IIMs need to go forward, not pulled down. The events of the last few months sadly show evidence more of attempted control through manipulations than of clarity on education. Is this the way the present government wishes to contribute to the image of shining India' Let us hope good sense will prevail. Any child who has read Harry Potter and the Order of the Phoenix knows what a threat those who refuse to see good sense can pose to an institution.

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