Thursday, September 17, 2009

How much do IIMs make through CAT?

From this story by The Economic Times' Hemali Chhapia:

... An RTI response revealed that the IIMs raked in Rs 28.36 crore in 2007-’ 08, up from Rs 24.16 crore the previous year, from CAT.

With about 450 faculty members in all the IIMs, the figure for 2007-08 -- Rs. 28.34 crore -- works out to about Rs. 630,000 per faculty.

[450 is an intentional overestimate. Here's a rough break-up (to within plus/minus 3): Ahmedabad -- 95 , Bangalore -- 103, Calcutta -- 90, Kozhikode -- 35, Indore -- 35, and Shillong --17. I don't have the number for Lucknow since the website is down as I write this post; I'm assuming it's about 50.].

Given the scale of operations (and from rumours we hear about GATE finances), I would expect the 'profit' from CAT to be at least a fourth of the revenues, and I wouldn't be surprised if it is as high as half the revenues. In other words, the profit per faculty is likely in the range of Rs. 150,000 - Rs. 300,000.

Not bad at all.


  1. pradeepkumar said...

    Since the profit doesn't go to individual faculty, why are you calculating profit/faculty? As far I understand the money will go the institute funds. Also, do you know how much money IISc makes through the the GATE and MTech/Ph.D admissions?

  2. Abi said...

    @Pradeep: This is just an exercise in normalization. For IT companies, for example, the revenue per employee is a fairly standard way of looking at the level of work they do (i.e., how far along the "value chain" they are at).

    What I have done here is to compute both revenue and profit on a "per faculty" basis. If you assume that each faculty member probably spends, on average, less than a week on CAT-related work, these numbers do tell an interesting story.

  3. pradeepkumar said...

    Abi, thanks for clarifications. But you haven't answered the second part of my question.

  4. Abi said...

    @Pradeepkumar: My info about IISc's GATE "profits" -- about Rs. 1 crore or so -- are based only on rumours. Which is why I didn't mention it in the post ...