Subsidise everything

12 March 2004

Why just the IIMs? Let the government slash the costs of expensive cars, posh real estate, designer clothes, 5-star meals, high-priced shares and, best of all, our taxes to just 20 per cent and subsidise the rest to keep India shining, says Kiron Kasbekar

Kiron Kasbekar

For four decades the Indian Institutes of Management functioned autonomously, and produced great managers and consultants who made this country proud. But Murali Manohar Joshi, the Bharatiya Janata Party's human resource development minister, whose achievements include the rewriting of history books and the introduction of astrology courses in universities, not to speak of being named as a suspect in the demolition of the Babri Masjid, which resulted in unprecedented riots and killings in the country, was not happy. The IIMs must have done something inauspicious.

The ministry struck, saying that the IIMs are elitist institutions and should cater to poorer students. It slashed the IIM course fees from Rs.1.5 lakh a year to Rs.30,000 — down to a staggering 20 per cent! The cost per student at leading IIMs is actually over Rs.3.5 lakh a year, and the government already subsidises them by over Rs.2 lakh a year per student!

N R Narayana Murthy, chairman of Infosys Technologies and chairman of the board of IIM-Ahmedabad, objected. The government should use public funds elsewhere in this poor country, he argued, rather than subsidise IIM students who are anyway assured of very high salaries even before they step out of their IIM courses, and who can therefore pay for the high cost of their education.

IIM-Calcutta students got an average starting salary of over Rs.50,000 a month last year (some students got much more). That is double what their fathers earned while their sons studied at IIM-C. Naturally, banks are happy to provide educational loans to all IIM entrants to cover their fees because they are assured of their loans being repaid.