Industry calls for reconsideration of IIM fees

Our management bureau
26 February 2004

The brouhaha over HRD minister Murali Manohar Joshi's interference with the working of the Indian Institutes of Management will not end easily. Corporate India, many of whose leading managers have emerged from the portals of the IIMs, and which depends upon the IIMs to supply it with trained managers, is keen to ensure that these leading institutes are not made into sacrificial goats at the altar of political expediency.

The latest salvo has come from N R Narayana Murthy, chairman of the board of governors of the Indian Institute of Management, Ahmedabad, M S “Vindi“ Banga, chairman of Hindustan Lever and member of the board of governors of IIM-A, and well-known marketing consultant Rama Bijapurkar, who is a guest faculty member at IIM-A.

At a press meet in Mumbai yesterday they called on the NDA government minister to reconsider his decision to slash fees at the IIMs. This was a larger societal challenge and its impact would be felt 15 or 20 years from now, they explained.

Mr Narayana Murthy and Mr Banga stressed that the fee cut would not make the IIMs more accessible to the poor. The ministry's priority should be to enhance the number of management seats in the country and to set up more such institutions, they said. The correct way in which poorer students can be helped, if that is what is needed, is through scholarships and educational loans rather than a general slashing of fees, which will affect the quality of the education and make everybody a loser. Mr Narayana Murthy called the government's approach a “lose-lose“ proposition. He said there was no need to subsidise higher education.

Mr Joshi's fee-cut diktat and his demand that the IIMs expand the number of students per batch will only raise the public subsidy level steeply. Instead of subsidising IIM students who get high salaries on graduating and are therefore in a position to pay for their education, the government should be considering improving education at lower levels, "to enable a larger number of students from diverse backgroundsto gain admission into IIMs," said Mr Banga.

According to Mr Banga, the actual cost of training a student at IIM-A is Rs.4 lakh, and (at the current fee level of Rs.1.5 lakh) students at this institute are already subsidised to the extent of Rs.2.5 lakh. The government's order to slash fees would only raise the subsidy level much higher. Terming the government's move retrogressive, Mr Banga said considering the health of the economy, subsiding IIM students is not a priority.