There has been considerable debate on the proposed restructuring of the Indian Institutes of Management (IIMs), which has been undertaken by the government, and comments have been sought on a draft Bill in this regard. Such restructuring has been in the works for the past over a decade, considering the number of committees that have examined IIM-related issues.

What’s wrong with the IIMs? Various committees and government representatives have identified broadly the following concerns: that the number of MBAs need to be increased; that the degree should be called MBA rather than the Post Graduate Diploma in Management (PGDM) currently being given; and that the IIMs are a budgetary burden on the government exchequer. Most of the solutions presented in the Bill fall under the categories of oversight and governance, budgetary checks and levels of autonomy, besides the issues of renaming the degree.

Coming first to the governance and oversight issues, the critical changes proposed relate to making these IIMs statutory organisations rather than nuclear-society-run institutions. This would immediately bring them under the ambit of parliamentary debate and intervention. Elitist that these IIMs (at least the older ones) are, the people’s representatives would like to have control on these and run them down like other universities. Perhaps the politicians would also like to interfere in faculty selection and getting students passed who, in the first place, would have got in through recommendations. The multi-layering of the oversight organisations would ensure that the director, whose performance would be reviewed each year, would have little time for achieving higher goals of eminence in thought leadership or enhancing the quality of the MBA or the Fellow Programme in Management (FPM). Students in PGDM, far from feeling let down by the name of the degree, revel in the exclusivity the nomenclature brings, which would otherwise have clubbed them with the products of roadside shops now dishing out MBAs. The constitution of the committees is a sure prognosis for higher level of government intervention, with the nominee members far outnumbering management professionals or institute representatives.

On the academic side, it it claimed that the FPM of the IIMs is not as good as the PhDs of the universities. The proliferation of universities, both public and private, has led to a slide in academic standards which cannot be believed. Many of these degrees can be faked or, better still, purchased in the right markets (which can be seen expressed in hushed tones). Even fake universities do exist, as can be seen by the UGC drives from time to time. Comparing the fellows from the IIMs to the PhDs of average universities can only be a travesty, which can best be avoided. The MBA and FPM degrees have developed a brand appeal and find listing in the respectable Financial Times and other rankings. It has been shown on the basis of percentage of rejections that getting into IIM Ahmedabad is more difficult than to get into the Ivy League colleges of the US.

Coming to the financial side, the desire to make the IIMs independent and not looking to government funding is, at best, ill-founded. Let us take IIM Ahmedabad as an example. The latest annual report on its website makes it clear that that income in the year 2012-13 was R164.4 crore, of which fees accounted for R85.33 crore and the government grant was zero on this account. It has built up a corpus of R69.8 crore, with an investment of R437.73 crore. For the past several years, no grant, plan or non-plan has been availed by the institution. Yes, it appears that in the initial years the government funding was available for non-plan purposes, mostly salaries, and a phased programme of refund can always be worked out if the government feels itself poor on this account. Compare this with the utilised funds in various other budgetary heads, as evidenced by the CAG’s latest report: R5,732.94 crore understated in the USO fund in 2013-14 (over R33,000 crore over the past 10 years), R4,334 crore unutilised out of R4,876 crore in R&D cess over the past 17 years, R11,402 crore unutilised in the Prarambhik Shiksha Kosh over the past 10 years. Further, aggregate savings in certain departments exceeded R7 lakh crore, excess interest payments ran over R42,000 crore in six years, unspent balances of over R1 lakh crore in plan assistance to states, and suspense account in disbursements over R1,300 crore.

There have been many attempts in the past to bring to knees autonomous boards and authorities, and these have invariably led to whittling down the levels of excellence and bred only sycophancy. Will the IIMs be next in line, considering the view that the IIMs “cannot expect to become fully independent of the government?”

The author is an MBA fromIIM Ahmedabad