IIMs aim to raise own resources, hike staff pay

Written by Kirtika Suneja | New Delhi | Updated: Feb 2 2012, 07:27am hrs
The Indian Institutes of Management (IIMs) have requested the Centre that they be allowed to raise funds from alumni networks and corporates to supplement budgetary support. The additional funds will help finance existing operations and new initiatives at the country's premier business schools.

The director of an IIM told FE that the governments financial burden will come down if the institutes are allowed to leverage their own resources for expansion and infrastructure programmes. We discussed this proposal with the human resources ministry at a recent workshop as the government cannot finance the requirements of all public institutions in future. The ministry is keen on giving us this autonomy, said an IIM director.

The Planning Commission's approach paper to the 12th Five Year Plan had recommended that IIMs should be encouraged to raise money through various legitimate means.

According to the director of a new IIM, old institutes have the advantage of vast alumni bases while new ones can benefit from corporate philanthropy.

Each IIM is a society formed under Societies Registration Acts, having a memorandum of association (MoA) outlining its objects and rules.

The board of governors is responsible for the general superintendence, direction and control of the affairs of the society and its income and property. The IIMs depend on government support for most of their finances. Recently, the HRD ministry amended the MoAs, empowering IIM boards to independently set up search-and-selection committees to shortlist three candidates for the post of director. In the new regime, four of the five old IIMs (except IIM-Calcutta) at Ahmedabad, Bangalore, Indore, Lucknow and Kozhikode are free to set up campuses, raise funds and dispose property except those purchased with public money.

Till now, these proposals used to come to the HRD ministry but after the amendments, the institutes can take their own decisions, said a ministry official.

The amendments will help us raise and manage funds, recruit and compensate the faculty and set up campuses in India and abroad, said Debashis Chatterjee, director, IIM-Kozhikode.

With the changed MoA, making faculty pay more flexible is on the institutes agenda and it is discussing the matter with the board. We are looking at excellent faculty and ways of retaining them by topping up their salaries, said Debashis Chatterjee, director, IIM-K. The institute is also looking at launching new programmes for working executives at its new campus in Kochi.

A review committee set up by the government under RC Bhargava, chairman, Maruti Suzuki had suggested that remuneration of all IIM employees be determined by the board, considering market conditions to attract and retain high quality talent, ability to pay, and the need to provide motivation for performance.