Feb. 3: Finance minister Jaswant Singh today slashed the allocation for the Indian institutes of management from Rs 74 crore to Rs 45 crore while presenting the interim budget.
It was “good news” for the IIMs in Ahmedabad, Bangalore and Calcutta. “We are happy with the finance ministry’s decision. We have been saying for some time that we don’t need government grants,” said an IIM source.
The three B-schools have reserves of around Rs 80 to 100 crore each and have a number of avenues — like consultancy and training programmes for corporates — to generate resources other than the tuition fees collected from students.
Union human resource development minister Murli Manohar Joshi wants the institutes to slash annual tuition fees from around Rs 1.25 lakh to Rs 6,000 — based on the recommendations of the ministry-appointed U.R. Rao committee — and peg their reserves at Rs 25 crore. Joshi’s ministry looks after the affairs of the IIMs and wants them to sign an annual memorandum of understanding (MoU) with the government.
The IIMs in Ahmedabad, Bangalore and Calcutta are opposing the minister’s moves and are yet to place their requirement for grants — for the next financial year — with the government despite Joshi’s promise of greater financial support. Normally, the institutes submit their demand for plan and non-plan grants from the government by end-December.
“The government hardly released any money to these three institutes as all three declined to sign up with the government,” said the source, while explaining the delay in forwarding the demands for grants to the government.
Last month, the board of governors in IIM Ahmedabad passed the institute’s budget without taking into account budgetary support from the government.
“During a meeting with the six IIM directors last Saturday, convened at very short notice and without any agenda, the minister said the government will give more grants to offset the effect of reduction in fees. But the finance ministry has reduced the allocation for us. Where will he get the money from'” asked the source.
At the meeting, Joshi reportedly asked the directors of the three IIMs to explain why they were not signing the MoU. After listening to their explanation, Joshi agreed to alter a few clauses in it and give some breathing space to the three premier B-schools. He even issued instructions to the department officials in this regard.
“We didn’t expect this as he always wanted to exercise control on us,” said an IIM faculty member. According to him, President A.P.J Abdul Kalam’s address to the nation before the Republic Day, where he opposed the idea of excess control on the IIMs and IITs, has forced the minister on the backfoot.