On February 5, the Delhi-based department of secondary and higher education (technical section V) of the Union ministry of human resource development presided over by Dr. Murli Manohar Joshi, one of the top three leaders of the Bharatiya Janata Party (BJP) the major constituent of the ruling 22-party coalition government, issued a terse five paragraph order. It directed the IIM managements to slash tuition-cum-residence fees payable by students admitted into the new academic year (2004-05) by 80 percent from Rs.1.5-1.75 lakh to a uniform Rs.30,000 per year.

Describing the annual fee of Rs.1.5 lakh ($3,340) as "exorbitant", while stressing that the IIMs "are fully funded central government technical institutions", and invoking the "observations made by the Supreme Court and the recommendations of the U.R. Rao Committee", the order (F.No.7-4/2002 T.S.V) decreed that "the revised fee structure will take effect from the academic session 2004-2005", and added ominously, that "the compliance report in this regard be sent to the ministry urgently."

This wholly unsolicited reduction in the annual tuition fee of the six IIMs (Ahmedabad, Bangalore, Kolkata, Lucknow, Indore and Kozhikode) has drawn an unprecedented storm of protest from middle class India — industry, academia, students and the media. Quite evidently the imperious February 5 order has reminded the informed public that during the past year Joshi has sacked the chairmen of the Indian Council of Historical Research, ICSSR (Indian Council for Social Sciences Research) and issued a diktat routing alumni donations to the seven Indian Institutes of Technology (IITs) through a specially constituted Bharatiya Shiksha Khosh trust (see EW cover story January 2004). Prior to these institutional interventions he blatantly commissioned the doctoring of school textbooks published by NCERT (National Council for Education Research & Training), to reflect hindutva nostrums of dubious authenticity.

Joshi: stalking the IIMs

The February 5 order of the HRD ministry has generated widespread indignation because it’s common knowledge that even the annual fee of Rs.1.5 lakh per year currently payable by the fortunate one percent of students admitted from among 150,000 graduates who write the IIMs’ Common Admission Test (CAT) every summer, is heavily subsidised. It’s hardly a secret that the actual cost of training and developing a graduate from India’s dumbed down higher education system into a globally accepted business manager is over Rs.3 lakh per year. In the circumstances the ministerial order is clearly a case of arbitrary and irrational exercise of power.

Predictably the rt. hon’ble minister refused to talk to EducationWorld with repeated calls to his office by our Delhi-based associate editor Rajiv Shirali remaining unanswered. However in an interview with The Economic Times (February 7), stating that it is natural for the "party in power to approach the people with policies which are favourable to the people", Joshi pooh-poohed fears that with their tuition fee income streams slashed by 80 percent the IIMs will experience a funds crunch. "The fear of no money being made available to the IIMs (to make up the shortfall) is baseless. First these institutes have corpus funds which are upward of Rs.85 crore. Institutes like the IIMs are not supposed to have such huge reserve funds. They get money every year from the government for maintenance and develop-ment expenses. I have suggested that they keep Rs.25 crore as reserve and then utilise the rest. As I said the IIMs will never starve for funds," Joshi told the ET’s Urmi Goswami.

Far from assuaging public apprehen-sions this and similar utterances of the minister have only served to fuel them. Informed opinion within academia and industry is almost unanimous that the issue is not of calibration of tuition fees but of administrative control of these autonomous institutes of professional education which thus far have insulated themselves from the nation’s notorious Midas-in-reverse politicians. Therefore they have succeeded in raising their academic standards and reputations to be reckoned among the best B-schools in the world. Somewhat belatedly there is a dawning awareness within academia and industry that the fate of the once great colleges and universities such as Presidency, Kolkata (est.1817), St. Xavier’s, Mumbai (1869), St. Stephen’s Delhi (1881) and Allahabad, Aligarh, Bangalore and Madras universities which are pathetically dependent upon government funding and have been reduced to shadows of their former glory, awaits the IIMs if their non-government income streams dry up.

This spreading outrage is being fuelled by media reports which indicate that following his hamfisted intervention in the extraordinary fund-raising efforts of the IITs (hitherto unprecedented alumni donations to these institutes have been reduced to a trickle and their directors have morphed into mewing kittens of the HRD ministry — see EducationWorld cover story January 2004), Joshi has been stalking the IIMs for over a year.

Early last year he called upon each IIM management to sign a memorandum of understanding with the HRD ministry under which the institutes would surrender surpluses in excess of Rs.25 crore to the ministry in exchange for guaranteed funding according to need. While three of the newer IIMs — Lucknow, Indore and Kozhikode — which have not built sizeable corpuses signed on the dotted line, the three major ABC institutes (Ahmedabad, Bangalore and Calcutta (aka Kolkata)) which following the Union government’s adoption of the Dr. Verghese Kurien Report of 1992 (see box p.48) have accumulated corpuses of Rs.60-100 crore, demurred. On the threshold of financial independence, their manage-ments quite naturally weren’t bowled over by the prospect of going cap in hand to the ministry every year.

Following this stalemate, in mid-2003 Joshi appointed a committee chaired by distinguished astro-physicist Dr. U.R. Rao to examine the issue of fee structures of "technical" institutes. Mysteriously, the committee recommended a sharp cut in the fees charged by institutions of technical education on the basis of research which indicates that in developed OECD nations, tuition fees in institutions of higher education average 30 percent of per capita national income. On the basis of this calculus the annual fees for technical education in India should be capped at Rs.6,000, Rao reportedly recommended (the committee’s report is a closely guarded secret, unavailable to the public or the media).

Though the U.R. Rao Committee’s report provided some ammunition to Joshi, since it was restricted to technical education and institutions affiliated to AICTE (All India Council for Technical Education) it was perhaps deemed too ambiguous (at that time) for the empire-building minister to apply its recommendations to the IIMs (each institute is constituted by a separate Act of Parliament and the IIMs are unaffiliated to AICTE). Unfortunately last November a paper leak of the CAT (Common Admission Test) examination which is jointly administered by the IIMs, provided another excuse for Joshi to press for greater ministerial control of the IIMs. Never mind the little detail that the leakage of the paper was from a central government controlled printing press.

Following the cancellation of CAT last November (which was re-written by 127,000 university graduates on February 15), charges of administrative ineptitude, elitism, profiteering were levelled on a daily basis against the IIMs by the minister. This prompted several captains of corporate India which is the major ‘customer’ of the IIMs — particularly N.R. Narayana Murthy the chief mentor and chairman of the Bangalore-based infotech major Infosys Technologies Ltd who is chairman of the board of governors of IIM-Ahmedabad — to get involved. Narayana Murthy reportedly met Joshi in end January and came away from an hour-long meeting satisfied that he had made the minister see reason for a hands-off policy on the IIMs.

Indian industry bewilderment

Kurien

Functional autonomy is essential for the IIMs, if they are to retain and enhance their capacity for excellence. Such functional autonomy is not possible without financial independence. The present system of determination of government grants annually is not conducive to adoption of practices of sound financial management within the IIMs — Dr. Verghese Kurien Committee report on Indian Institutes of Management (1992)

Ficci’s considered view on higher education is that there should be a phased reduction of subsidies and commensurate increase in tuition fees to improve the finances of institutions of higher learning. However, it is also essential that such a scheme is accompanied by safeguards to ensure needy students get easy access to soft loans for a period of 30 years or so at 5-6 percent interest rate to finance their education — Y.K. Modi, president, Federation of Indian Chambers of Commerce & Industry, Delhi

The slashing of fees will definitely reduce the income of IIMs, but to what extent it will actually make the institutions accessible to those who lack the means is questionable. I don’t really know if it is doing anything for this purpose at all — Satish Pradhan, vice president (group human resources) Tata Sons Ltd, Mumbai

The government should stop subsidising the IIMs and channel its funding towards primary and secondary education where there is a resource crunch. Several alternative methods like providing interest-free bank loans or merit scholarships for bright and deserving students can be worked out. Besides, education loans with low interest rates already exist and can be availed by students. Once students studying in the IITs and IIMs graduate they join multinational companies where they earn many times the amount they pay to their institutions. Hence subsidy to IIM students is not justified — N. Kumar, vice-chairman, Sanmar Group, Chennai

Rao

This is the Trojan horse for eliminating autonomy. It is reverse Robin Hood — robbing the poor to subsidise the rich — Jaitirth Rao, chairman MphasiS Ltd, Mumbai

Therefore the issuance a few days later of the HRD ministry’s infamous order of February 5 just a day before the term of this Parliament ended, came as a bolt from the blue as much for Narayana Murthy as for the directors of the six IIMs. And it’s a measure of Joshi’s desperation and/or the Union HRD ministry’s ineptitude that the February 5 order cites the Supreme Court’s judgement in the historic T.M.A Pai Foundation Case ((2003) 6 SCC 697) in which the apex court decreed greater administrative and financial autonomy for institutions of professional education and upheld their right to earn "reasonable surpluses", as well as the U.R. Rao Committee report which as Rao has repeatedly since confirmed excluded the IIMs from its ambit, as justification. These spurious justifications for slashing the already subsidised tuition fees at the IIMs by a massive 80 percent is certain to invite the wrath of the Supreme Court and signals the end of Joshi’s tempestuous reign in this sensitive ministry.

Narayana Murthy: futile meeting

The outrage in Indian industry over Joshi’s blatant land-grab of the IIMs (see box) is echoed by Indian academia. Though typically academics in the ABC IIMs chose discretion over the right of free speech, faculty in other B-schools which are likely to have to scale down their fees if Joshi’s February 5 order is upheld by the Supreme Court (where it’s been challenged), are more forthcoming.

Saxena (left): education loans option

Yet perhaps the most significant measure of the indignation which Joshi’s ill-advised tinkering with the IIMs, and the February 5 order in particular, has aroused is indicated by the reaction of the student community within the IIMs and beyond. For the first time in the history of post-independence India, an overwhelming majority of students of targeted institutions have protested against reduction of tuition fees. Widespread demons-trations on IIM campuses featuring students displaying placards imploring the minister not to reduce fees have undoubtedly come as a great shock to Joshi and other cowbelt politicians long accustomed to buying off the public with populist, self-serving gimmicks. And Joshi’s bleating about the quality of education having no connection with tuition fees has failed to cut ice with IIM students who have not only agitated against the order but also against the incremental erosion of the autonomy of the IIMs. Indeed the upside of this whole contretemps has been the awakening of the student community which for the past five decades has been used as cannon-fodder by politicians to grab control of India’s once-qualitative institutions of higher education and ruin their standards and reputation.

Singh (second left): campus-wide plunging standards fears

Moreover in a rare and unusual display of middle class unanimity, the media too has fallen in line with industry, academia and the student community and has trenchantly condemned Joshi’s harass-ment of the IIMs and IITs. Describing the minister as a "control freak" who has "unleashed a new wave of ministerial interference in education" which goes against the spirit of liberalisation which is pervading every sector of the Indian economy, a lead editorial in the Indian Express (February 9) commented: "It has taken a long time for the middle class in this country to accept the fact that while higher education is highly subsidised, there are inadequate funds for school and vocational education. Rather than devote funds for the latter, Joshi is trying to increase the dependence of ‘elitist’ institutions on government subsidies. Their elitism is not defined by the fees they charge but by the credibility of their brand. Minister Joshi’s policies may be aimed at cutting fees, but will end up damaging the brand, especially if mediocre officials from his ministry call the shots and instruct qualified academics on how they should run their institutions."

Parekh: painful death forecast

In his urgently but brilliantly drafted writ petition, Parekh enumerates the reasons why he felt it incumbent upon himself to move the nation’s apex court to stop Joshi running amok within the IIMs. According to Parekh as per calculations detailed in "Annexure I" to his petition, notwithstanding its current corpus of Rs.100 crore, IIM-A would be "bankrupt in 3.8 to 6.5 years, unable to run even its current account expenses" if the February 5 order is not quashed by the Supreme Court. "The impact on the less prosperous IIMs (Lucknow, Indore and Kozhikode) would be even more dramatic because they have no reserves/corpus on which they can draw. The resource crunch if the order were to take effect, would not be felt for a few years but will result in a slow and painful death for these institutions which would see faculty leaving, the brand image damaged, guest lectures and research declining, libraries becoming outdated and various other intangible deteriorations forcing the IIMs to struggle instead of fighting to excel as they do currently," says the petition.

Therefore the prayers (i.e pleas) of this timely writ petition which calls upon the apex court not only to quash the February 5 order, but also "to restrain the respondents from interfering in the setting up of the fee structure, reduction of the corpus of the institutes, increase the workload of professors, interfere in faculty appointment(s) or mandate a faculty-student ratio... and restrain the respon-dents from abolishing the CAT exam".

Although the Supreme Court fast-forwarded the hearing on the admissibility of the petition, a three-judge bench presided by Chief Justice V. N. Khare which heard the petition on February 16 was surprisingly less than sympathetic to the petitioners. Subjecting counsel Ashok Desai for the petitioners to a barrage of questions, Khare reportedly questioned their locus standi, speculated why the IIM managements have not complained about the February 5 order and remarked that institutions of excellence should not be accessible only to the elite. Asking the parties to file affidavits indicating the break-up of the current tuition fee and to provide balance sheets of the past six years to the court, the bench (A.R. Lakshmanan and S.H. Kapadia JJ included) posted the case for February 27.

With this issue of EducationWorld going to press on the latter date, it is not possible for this narrative to update the reader of the very latest developments in this case which has outraged India’s rising middle class. However despite the apex court’s lukewarm initial response to the writ petition, it is difficult to envisage grounds on which the court can reject its prayers to quash the February 5 order and ask the HRD ministry to cease and desist from interfering with the administration and processes of the IIMs.

For one, as the majority judgement of the full-strength 11-judge bench which heard the historic T.M.A Pai Foundation vs. State of Karnataka & Ors (October 2002) perspicaciously observed, low fees charged by institutions of professional education don’t necessarily benefit poor students because "students from affluent families have better school education and the benefit of professional coaching facilities and are therefore able to secure higher merit positions..." in common entrance exams. This is particularly true of the CAT exam conducted by the IIMs which is written by 125,000-150,000 students, of whom a mere 1,500 are handpicked for admission. According to iWatch, a Mumbai-based NGO, private tutorial institutes rake in Rs.3,000 crore annually from IIT/ IIM aspirants.

Secondly, the court should take judicial notice of the ground reality that there is a severe constraint of funds available for education in general and that Joshi’s airy promises to make good the revenue shortfall if IIM tuition fees are slashed by 80 percent, are less than reassuring. It’s hardly a secret that at 2.8 percent of GDP, India’s annual allocation (centre plus states) for education — primary, secondary and tertiary — is not only below the global average, but also wholly inadequate.

Academia: misdirected largesse

Mehta

It is probably true that government could, legally speaking, have some say in institutions like the IIMs on the ground that as a society we have a right to decide what our taxes go for. But I think we have learnt over the years that government erosion of the autonomy of institutions in the long run extracts a bigger cost from taxpayers: it destroys centres of excellence, violates academic freedom, creates regulatory uncertainty. Second, as a society we have to learn to accept that there will be institutions of all kinds and there is no single-size-fit formula for all — Pratap Bhanu Mehta, professor of philosophy, law and governance, JNU Delhi

Management graduates earn such extraordinary salaries that there is no justification for subsidising them. Why should the poor toil and pay taxes to subsidise the luxury that awaits management graduates? American universities do not subsidise MBAs. MBAs are in the business of making money; they do not deserve charity — Dr. P.V. Indiresan, former director, Indian Institute of Technology, Chennai

Should we subsidise the IIMs, or should we spend more money on elementary education, on schools that don’t even have blackboards? For that matter, should we continue to subsidise undergraduate and postgraduate education in our universities to such a degree that they charge tuition fees of just Rs.15 and Rs. 18 per month? — Prof. M.M. Anand former dean and head, Faculty of Management Studies, University of Delhi

Shrikant

The leadership of management institutes has not been very effective. It is not a question of protest. It is a question of educating those in positions of power about the cost structures of management education. Also perhaps, the expectations of society from the IIMs have not been met and in this respect IIMs have failed — Dr. M.L. Shrikant, honorary dean of S.P. Jain Institute of Management & Research, Mumbai

The ministry’s diktat is a result of the government’s social objectives and we have no argument with that. It just means that we will have to rework our budgets, raise more resources and tighten our belts. In all this we shall not allow the quality of services offered to students, the faculty and brand equity to suffer. Anyway the government has said that if there are deficits, they will be covered — Dr. Devi Singh, director Indian Institute of Management, Lucknow

The glaring consequence of the perennial shortage of resources for education — and the learned justices of the apex court need to take judicial notice — is that 20 percent of rural primary schools are single teacher institutions, one-third of them don’t have proper buildings, 58 percent don’t offer drinking water and over 70 percent are bereft of toilet facilities. In the circumstances enhancing the subsidy of IIM students across the board (quite obviously the Rt. Hon’ble minister hasn’t heard of means testing) is tantamount to criminal negligence. Especially bearing in mind that the average annual remuneration of a fresh IIM graduate is Rs.6-8 lakh which makes it very easy for him/ her to service education loans liberally being dispensed in the post-liberalisation era.

IIM-Bangalore perspective: modest corpus

Against this backdrop it is almost a certainty that the comprehensive writ petition filed by Parekh and the two IIM students which received a less than sympathetic initial hearing in the Supreme Court on February 16, will succeed and the February 5 order of the HRD ministry will be quashed. Moreover it’s also possible that the other prayers in the petition asking for reduced interference by the ministry in the affairs of the IIMs will be substantially, if not wholly, granted. If so it is also likely to signal the end of Joshi’s turbulent reign in the Union ministry of human resource development. Even if the NDA coalition secures a majority in the general election scheduled for April as seems likely, Joshi — the most proactive and high-profile education minister in post-independence India — is unlikely to win back this portfolio. He has proved himself too abrasive and aggressive within a sensitive ministry which requires a plethora of soft skills and diplomacy.

Yet regardless of the verdict of the Supreme Court in this historic and watershed case and of the fate of Joshi which now hangs in the balance, it would be all to the good if this unsavoury episode also prompts some introspection within the faculties and boards of governance of the IIMs. In particular their managements need to reflect upon the extent to which their brahmanical and all too superior management styles and attitudes — at public expense — have contributed to arousing the hatred, ridicule and contempt of Dr. Joshi and the educracy at the centre and in the states.

Unprecedented student protest

The decision to cut fees will only bring down the quality of education offered at the IIMs. Also this whole issue of taking in more students doesn’t make sense. Personalised, individual attention will not be possible and this can only end up bringing down the high standard of IIM courses — Nehal Mehta, Bombay School of Business

I don’t approve of any drastic cut in fees at education institutions that are centres of excellence. Even though I’m in the age group which stands to benefit from a fee cut, I’m not a supporter of the government’s action. Rather, I am struck by the downside of the decision — Puneet Poddar, International Management Institute, Delhi

What the minister has done is that he has solved a problem where none existed. No student who’s been admitted into an IIM has ever faced any problem about either getting or repaying loans. But with the government deciding to slash fees of the IIMs and curtail their funding, it will definitely make these institutions weaker. And once this is done, the government can easily step in and intervene in their functioning — Saikat Sengupta, IIM-A and co-petitioner in writ petition No. 63 of 2004

Ramaswamy: blind imitation charge

According to Prof. N.S. Ramaswamy, promoter-director of NITIE and the Jamnalal Bajaj Institute of Management, Mumbai as well as IIM-Bangalore, over the years the IIMs have developed an overwhelming bias in favour of shaping managers for private sector industry while incrementally neglecting the training needs of public and government sector organisations. "Of India’s work force of 350 million, only 50 million are in the organised sector. Of this 50 million, 22 million work in government controlled organisations such as the railways, road transport corporations, electricity boards, ports, airports, banks, insurance corporations, development agencies etc. The great majority of IIM graduates won’t even dream of working in these organisations which have to make do with their own management develop-ment and training institutes which are of very poor quality. The IIMs must exhibit a willingness to train their faculties and the HRD ministry could subsidise this activity instead of subsidising the education of students who inevitably land highly paid jobs in multinationals and top private sector companies in India and abroad. But the training and development needs of public sector enterprises whose inefficiencies directly hurt millions of citizens receive scant attention in latter-day IIMs whose proud managements are blindly imitating flawed western models," laments Ramaswamy.

There’s considerable substance in Ramaswamy’s charge that over the decades, IIMs have become complacent and inward-looking. Battened on generous subsidies from the public exchequer flowing into their state-of-the-art 100-acre plus campuses, the massive annual scramble for admission, low teacher-pupil ratios and uncritical industry and media adulation, the faculties of the IIMs tend to regard themselves as the Boston Brahmins of Indian education. Lulled into complacency by the industry scramble for their graduates at mind-boggling (in the Indian context) remuneration packages, they tend to unwarrantedly appropriate the credit for this phenomenon unmindful of the reality that it is the high quality of students admitted into the institutes who have built the reputation of the IIMs rather than their faculties. In terms of research output and papers published by faculty, IIMs lag way behind front-rank B-schools abroad.

Moreover even if narrowly qualified in their subjects, IIM faculty conspicuously lack soft skills such as communication ability and inter-personal management knowhow which are prerequisites of success in the rapidly emerging global economy. The thousand unnatural shocks and slights which successive manage-ments of IIM-B have administered to Prof. Ramaswamy despite his being the founder-director of the institute, are well-known in Bangalore’s academic circles. And while writing this feature this writer (despite being the original media champion of the IIMs in another avatar) experienced the under-developed soft skills of top managers of several IIMs who seem unaware of their public accountability obligations. For example over half-a-dozen telephone calls to elicit basic information from IIM-A director Bakul Dholakia were stalled and remain unanswered. Likewise a request for public documents to V.G. Apte, director of IIM-B was adamantly rejected. Little wonder that Indian business managers have a notorious reputation in India and abroad for bad manners and poor soft skills.

The silver lining to union HRD minister Murli Manohar Joshi’s ill-fated land-grab to take over the IIMs is that it has focused a powerful spotlight on the nation’s elite B-schools. Quite clearly the next step in their development is for them to reduce their dependence on government and evolve into self-governing independent schools whose voice, opinions and contributions are respected not only within industry but within government and the public sector. In addition they need also to learn to compete with the best B-schools in the West for students and research grants from around the world. But for this natural process of evolution to succeed, these institutes of excellence need to be free of the apron strings of government and the Union HRD ministry in particular.

Paradoxically, Dr. Murli Manohar Joshi’s ill-conceived interference with the IIMs may facilitate this natural evolutionary process.

With Rajiv Shirali (Delhi); Gaver Chatterjee (Mumbai); Hemalatha Raghupathi (Chennai); Puja Rawat (Lucknow) & Sujoy Gupta (Kolkata)