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IIMs jittery on foreign competition
Samir Barua (top), Kapil Sibal

New Delhi, Oct. 16: The IIMs have for the first time expressed concerns over government plans to allow foreign universities into India, arguing that existing regulations may hurt their ability to compete — even as they themselves eye campuses abroad.

India’s premier business schools today told HRD minister Kapil Sibal that they were concerned about losing some of their best teachers and students to foreign universities, top institute officials said.

“We are concerned that foreign universities may eat into our faculty and student pool,” IIM Ahmedabad director Samir Barua said after the meeting between the directors and the minister.

 

Sibal said the government would ensure a “level playing field”.

But the concerns voiced by the IIM directors are shared by several faculty members at the IITs too, with the institutes arguing that government restrictions may leave them unable to beat any challenge foreign universities may pose.

The fears — expressed through emails between senior professors across the IITs and IIMs since August — revolve around the perceived inability to compete with faculty remuneration that foreign institutions may offer.

The loss of their best teachers could slowly start influencing the brightest students into choosing private or foreign institutions over the IITs and the IIMs, the emails argue.

The government determines the basic salaries of all faculty at the IITs and the IIMs, though the boards of governors of individual institutes can offer additional incentives. Salary scales were raised recently after 10 years.

The faculty of both the IITs and the IIMs are allowed to earn additionally through consultancy they can offer to private companies — a part of the earning has to be contributed to the institute.

At neither the IITs nor the IIMs do fresh PhDs joining the faculty win themselves consultancy projects. “Companies prefer established excellence over rookie brilliance,” an IIT Delhi professor said.

But it is in attracting young PhD holders into the faculty that the IITs and the IIMs face their biggest challenge, with the institutes suffering potentially crippling teacher shortages.

The IIMs already face tough competition in India from the privately run Indian School of Business (ISB), supported by both the Kellogg and Wharton business schools. A senior IIM Calcutta professor recalled a recent instance when the institute wanted to hire one of their brightest students after his PhD. “We were desperate to hire him, he was that good. But ISB made him an offer which he could not refuse.”

Like their counterparts such as Cambridge and Oxford in the UK, American public universities are run from an endowment fund that consists of government support, donations from alumni and philanthropists, and earnings through industry collaboration.

In contrast, private universities, including the Ivy League institutions and top B-schools such as Kellogg and Wharton, do not seek any government support and finance themselves completely. But top public universities such as the University of California try and ensure that at no stage are their teacher salaries far below the highest pay offered by a private university in that state.

The concerns over foreign universities were ironically raised on a day when Sibal announced that he was “in principle” not averse to allowing the IIMs to set up campuses abroad.

“I have asked the IIMs to prepare a roadmap for how they plan to set up foreign campuses,” Sibal said.

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