Save the Educational 'Navaratnas'
The Economic Times - December 2003

It is ironic that in the 1960s, at the height of our socialist ideology, with the Government controlling most things, IIM Ahmedabad and Calcutta were set up as autonomous institutions, supported but not controlled by the Government, (and with foreign collaboration to boot!) Yet, in the 2000s, when the whole country is embracing reforms, liberalization, and strengthening of institutions for self-reliance, and when we are saying to the world "we have intellectual capital to offer, and that's what makes India so special", the ministry of HRD is seeking greater control of these same institutions.

Why should there be greater centralization and control of educational institutions that have proven that they can be self reliant and are in a position to compete with global institutions? The government did a great job in setting up and nurturing these institutions, and has been a wonderful value adding partner. Now it is time to give them greater freedom and the flexibility and encourage them to become formidable global institutions. If the Government is convinced, as it says it is, that the PSU 'navaratnas' must now have progressive reduction of Government control for them to prosper and achieve their fullest potential, why can it not extend the same conviction to the IIMs and the IITs, which are the 'navaratnas' of education?

Two editorials with diametrically opposite views concerning "Government's intervention in IIMs' Finances and Admissions" appeared in the Times of India of 21 November 2003. One said "Sarkari interference will ruin centres of excellence." The other said "If the IIMs abide by the principle of social responsibility, they can rightfully expect to get full government support. But if they want to ignore their social obligations, it would be unfair to expect continuous funding."

These two varying point of views pose the following issues:

(1)	What purpose did the Government of India want the IIMs to accomplish, and have they delivered on that?
(2)	What is the role of the Government in the governance of these Institutes?

The Government of India established the first two Institutes of Management on the recommendations of George W. Robbins, Associate Dean Graduate School of Business Administration University of California, Los Angeles. Dean Robins, in his report on 20 December 1959 observed:

"It (Institute of Management) must be regarded as a high-priority national asset, indispensable in the development of the resources of management, i. e. the manpower to translate natural resources, technology, and human talent into effective organisations to produce wealth. (Emphasis added). Accordingly, it must receive financial support from industry and government adequate for its needs in a planned, phased development.

The Institute should be inaugurated as an autonomous independent organisation with broad but specific charter and with a governing body representative of the highest ranks of business, government, and scholarship. (Emphasis added) The governing body should function to approve basic educational policy and budget, and to provide financial and other support."

Have the Institutes' educational programmes created manpower to translate natural resources, technology, and human talent into effective organisations to produce wealth? A survey of the IIMs alumni over the years will prove that they have indeed done so, both in the public and the private sector.

Let us look at the issue of financial support. In consonance with the thinking of 60s and 70s, on the relative roles and obligations of industry and government in education, Central Government made the largest financial contribution for setting up the Institutes, and stipulated everything from fees to faculty salaries, and even the rates they should charge for consulting. The Director's appointment was (and still is) a Government decision. In 1992, the government declared that it would provide only limited funding, going forward, and that the IIMs must earn their own money to fund their future growth aspirations. The top three IIMs managed to do just that in the last ten years. There is now a proposal to restrict the size of the institutes' corpus fund. This would reduce the institutes' capacity to spend money on material development and faculty, which are essential for competing with the best institutions in the world. The institutes will have to depend on government funding, which may not come easily in future, and worse, might be contingent on 'compliant behaviour'.

The Dean Robins report unambiguously articulated that the government, through representation on the governing body of the institutes, should play a role in the governance of the Institute. In the Insitutes' charter, many control mechanisms have been there since the inception, but so far, they have been used judiciously, in spirit. Now the government seems to have come to the conclusion that it is time to invoke the letter of the law to seek greater control.

The first step in this has been controlling the choice leadership by bringing changes in the process of choosing the Chairman and the Director. In the choice of these leaders, the government always had the final word, but in earlier days, all stakeholder's views genuinely counted.

Despite government stipulated salary scales of faculty and staff, which are much lower than what industry offer, the IIMs have been able to attract quality faculty thus far, and outstanding chairmen, because of the autonomy they enjoy. If that too is taken away, the seeds of rapid decline will be sown. The core strength of any academic institution, I am sure the Minister of HRD, himself a well respected academic, will agree, is the quality and commitment of its faculty.