The Hindu Business Line : B-schools — Why does the Govt want to manage them?

Institutions of excellence thrive on autonomy, innovation and empowerment. Worldwide, they are self-driven and self-governed, pursuing growth on their own terms.

DURING the last five years, rewriting history has been the concern of the Human Resource Development Ministry and now it is embarking on rewriting the policy on governance — seeking more control, less autonomy and more interventions.

Nobody would fault the HRD powers-that-be if these contribute to improvement in quality, and enhance the value of human capital. What is troubling is the Ministry's attempts to undermine the excellence of institutions that have made India proud. Every national daily and weekly has, during the last month, raised questions on the Government's role vis-à-vis the Indian Institutes of Management.

The IIMs, like the IITs (Indian Institutes of Technology), have emerged as globally ranked business schools today. Whether you go to Harvard or Stanford, Kellogg or Wharton, Emory or London, INSEAD or IMI, you find IIM graduates on the faculty. Many management gurus, including Profs C. K. Prahlad, Jagdish Seth, Krishna Palepu and Dr Raghuram Rajan, are IIM products. And we must not forget that nearly a million young men and women in the country vie for admission to these institutions every year. It is in this context that one needs to understand why, slowly but surely, the HRD Ministry is planning to take control of these national institutes.

Over a decade ago, the government liberalised policies, unshackled controls, established autonomous institutions and encouraged some of them to stand on their own feet, as self-financing institutions. The HRD Ministry evolved a policy of matching grants, under which the IIMs were encouraged to generate surpluses.

Every year, the government gave them a matching grant to build up an endowment for their growth. IIM-Ahmedabad created an endowment of over Rs 100 crore, while IIM-Calcutta and IIM-Bangalore exceeded Rs 60 crore. But, then, all of a sudden, the Ministry decided to stop the matching grant.

It is yet to disburse the outstandings it owes these institutions. And, now, the Ministry has recommended that IIMs should reduce the endowment to around Rs 25 crore as the government would continue to support their budgetary requirements. It has further advised the IIMs to scale down tuition fees to Rs 20,000 a year.

There is no logic why an IIM graduate, who receives an average salary of Rs 6 lakh per year on graduation, should pay a pittance of a tuition fee. More so when all students who are admitted on merit can easily get their education financed by a bank.

These interventions by the Ministry are seen by the IIMs as an attempt to create dependence on the government, enabling increased intervention and control. This, of course, is neither desirable nor should it be acceptable to high-performing institutions.

Only this week, it appears that the IIM-A Board of Governors has decided that it would no longer require the government's budgetary support. It has said it will be able to meet the institute's budgetary requirements from its own resources. Now it is the HRD Ministry's turn to react.

Professional higher education should be self-financing. It must reduce the burden on consolidated funds of India. Therefore, the IIM-A decision augurs well for the country. It will enable the government to provide enhanced resources to primary and secondary education, which needs massive government support.

Institutions of academic excellence thrive on autonomy, innovation and empowerment. Worldwide, they are self-driven and self-governed, pursuing growth on their own terms.

Whether it is Oxford or Cambridge, Harvard or Chicago, Stanford or Washington, they all operate on the same principle. They are the institutions that have produced a large number of Nobel Laureates. IITs and IIMs in India are institutions of the same genre. They have made the nation proud and need to be encouraged to excel.

The recent CAT episode — where question papers of the IIMs' Common Admisson Test had leaked out and the test itself had to be cancelled — has certainly given the HRD Ministry a stick to beat the IIMs with.

The recent leakage of the CAT paper certainly should not be condoned. But one lapse does not wipe out these institutions' excellent performance record. Let this not be an excuse for throttling these great institutes, and making them pliable institutions.

During the last decade, in order to strengthen the supply side, the HRD Ministry has encouraged liberal opening of management schools in the country; which number around 1,000 today. While one appreciates the attempt to meet the rising demands for higher management education in this country, one cannot approve the mushrooming of teaching shops, ill-equipped to comply with even the minimal norms and standards established by the AICTE.

While the Government should focus on improvement in the quality of higher education, it is unfortunate that its attention is on reintroducing the regime of control and command. This is certainly a retrograde step. In the name of uniformity, we should not kill some of the best management schools in the country. The pursuit of uniformity in education is a sure way of undermining innovation and creativity in the institutions of higher learning.

Of late, it is increasingly recognised that the nation's competitive advantage lies in its human capital. Backed by the large pool of professional, technical manpower, the knowledge economy is generating wealth for the nation.

The emergence of knowledge-based industry, the growth of service economy and the importance of human resources in fuelling their growth have brought home the need to nurture quality educational institutions in the country.

According to a recent analysis, the IIMs have built up a capability to become self-sustaining financially. IIM-A, -B and -C generate enough surpluses to do away with government assistance. The other three IIMs will also be viable shortly. The Government should encourage them also to be self-financing institutions.

The HRD Ministry has encouraged many private initiatives in higher education. NIIT and Aptech, outside the Government fold, have done a great job of promoting IT education, not only in India but worldwide. Some of these are not only academically sound but also financially viable.

The government should invest its energy in ensuring quality of education, and allow the market forces to decide the rest. People say that India is shining in spite of the Government, not because of it. The Government has created the context for institutions and people to perform.

The opening up of the economy has offered a platform for institutions to excel. The Government's attempts to encourage private initiatives and transparency in policies in higher education have certainly added to the velocity of growth. Let this not be derailed. Education is critical to the nation's development. Let not the HRD Ministry play around with it.

(The author is the former Principal, Administrative Staff College of India, and Chairman, All-India Board of Management Studies, AICTE.)

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