The Telegraph
Since 1st March, 1999
Email This Page
Joshi prefers IIMs on crutches
- Draft memorandum seeks to squeeze financial freedom

Calcutta, Aug. 24: Indian institutes of management do not want government funds, they want freedom.

Murli Manohar Joshi, the human resources development minister, is offering them funds, but will not give them freedom. Not only that, he is threatening to take away whatever freedom they have and make them forever dependent on government handouts.

In a draft memorandum of understanding sent to the IIMs at Ahmedabad, Bangalore and Calcutta, the ministry has asked the country’s top three business schools to cut the cash pile they have built up over time to Rs 25 crore before seeking any financial support from the government.

In the case of Calcutta, this accumulated money is around Rs 100 crore. Even assuming the government does not provide any funds, IIMC has enough of a nest-egg to pay for itself. Once this is whittled down to Rs 25 crore, the ability to stand on its feet will also be denuded, making the institute reliant on the government’s — as represented by the minister — benevolence.

IIMC receives an annual grant of Rs 8 crore, primarily in the form of salaries, from the government. Though IIMs are autonomous bodies registered under the Societies Act, the Centre is their main promoter.

“The ministry is trying to push this issue for over a year, but we are against it. It’s nothing but a tool to tighten control over these premier academic institutes. The institutes have enough resources and can survive without the annual grants,” a source at IIMC said.

The ministry also wants all foreign aid and grant to the institutes to be channelled through the Siksha Kosh set up by the government. The bottomline, again, is: more control. This money goes directly to the IIMs now.

If the ministry can control this flow, the IIMs will find it difficult to choose full freedom and decline all official support.

In return for signing up, the government promises free flow of funds. For not signing, the punishment is withdrawal of financial support. In a written note, it has told the IIMs that it will not release funds to support any expansion or development expenditure unless they sign the MoU, sources said.

In the annual MoU, the institutes have to describe all their academic, infrastructure and financial plans, the sources added. It will allow the government to evaluate faculty performance.

It also requires the institutes to agree to increase seats on a regular basis, an issue that has been a bone of contention in the past.

Despite repeated attempts to elicit comment from Joshi’s ministry, no official spoke.

The IIMs are also keeping quiet. “We are not in a position to comment,” said Shekhar Choudhury, director, IIMC.

But sources indicated that “informal discussions” were going on among the institutes in Ahmedabad, Bangalore and Calcutta to work out ways to thwart the move.

Two reminders asking why the institute hasn’t signed have already reached Calcutta. Pressure has mounted with word reaching Calcutta that the IIMs in Lucknow, Indore and Kozhikode are giving in to the government’s demand.

Faculties in the top B-schools are against signing up because they don’t want to sacrifice financial sovereignty and are against compromising on quality by increasing the number of students beyond a point. The IIMs have for a while had differences with the ministry over increasing seats and putting a brake on fee increase.

“Concepts like drawing up a long-term plan and monitoring the performance of the institutes by devising an annual performance management system and setting up Siksha Kosh to distribute funds where they are needed most are good proposals. But we can’t rule out the possibility of the ministry carrying on with the saffronisation agenda and instructing us to teach only Indian values and ethos in management programmes,” the sources said.

In February 2002, former IIMC chairman Subroto Ganguly had resigned from the board of governors to “protest” against a “hidden political agenda” and the “high-handed” approach of the ministry.

Email This Page