Wednesday, January 18, 2006

'Break the shackles'

ToI has an editorial about India's higher education system, demanding that it be unshackled. While I am in agreement with most of the things it says (allowing many different kinds of universities -- public, private and foreign, letting them function in an autonomous fashion), I found it irritating that it chose to highlight the government's recent decision shooting down IIM-B's wish for a satellite centre in Singapore. I will try to argue against IIM-B's original choice without extending any support to the government's meddling in the affairs of a supposedly autonomous institution.

Well, in the last sentence, 'supposedly' is the keyword. The experience of IIMs over the last five years or so has clearly shown that their autonomy is a mirage, an illusion. This will always be so, for the simple reason that the government 'owns' them! Not just the IIMs: the government owns pretty much every university in the country. There is a strong government representation on their governing councils, and the government cannot sit idly by when they do something that is perceived to be inimical to the public interest. [It's an entirely different matter that what was 'inimical' to M.M. Joshi is not so to Arjun Singh!]

When you (or, an institution) are 'owned' by an individual, you do his or her bidding -- or, you walk. But you do have some (but only some!) leverage when you are owned by the government, as the IIMs are. You can get the public opinion (at least, that of prominent people such as Narayana Murthy) behind you, and you can use other tricks in the book of persuasion. If things work your way, you will have raised a stink powerful enough to make the government back off. But you also realize that all your efforts will be of no use when your owner is represented by a cussed fellow with Joshi as his last name and two M's as his initials.

Under these circumstances, all public institutions that have a sheet of paper with 'autonomy' written on it keep testing the limits of this autonomy. In fact, they have an obligation to test the limits. While doing it, however, their case must be seen as being aligned with a larger public interest (which the government of the day may not agree with, nor, even see). It is this compelling public interest that I fail to see in IIM-Bangalore's proposal for a satellite in Singapore.

By any yardstick, it is impossible to make an argument that our country is so full of high quality management institutions that the only way a place like IIM-B can grow is by going abroad. In fact, the reverse argument is far easier to make: since we still have such a huge task of training so many people in management and allied areas, public institutions such as IIMs could expand their operations in India, and they will still be doing great business 25 years from now!

While at it, I might as well propose something as impractical as demanding 'complete autonomy' for institutions like the IITs and IIMs: let the government allow IIMs (and other such institutions that are confident of surviving by themselves) to go completely private. They have the brand equity and clout to pull it off. [During the dotcom boom, there was indeed a proposal from some IIT alumni to take the IITs private]. They will then be truly unshackled!

The benefit for IIMs (and other such institutions) is that they can then pursue their interests without having to worry about those of the others (and those of the government in particular). In other words, they can become free to do what S.P.Jain's of the world can -- set up a satellite centre not just in Singapore, but also in Dubai; and perhaps in Durban and Dublin as well!

The benefit for the government is that with the money thus saved (about 100 to 250 million rupees per IIM per year), it can set up more IIMs. In other words, the government can recapture its 'rightful role' (!) as a venture capitalist in the area of starting great institutions of higher learning!


  1. Anonymous said...

    Interesting post.

    Two questions:

    1) Are you saying that public opinion = Narayan Murthy?! Who is Narayana Murthy? Why do some people regard him as god? Why should his personal opinion influence public policy and thus my life?

    2) What do you think of the kind of mindset that wants an IIM in Singapore even as the demand in India is far from met? What causes such myopia? And what will such a mindset do if the IIM's were to be private?

  2. Anonymous said...

    Even without complete autonomy, IIMs are recognized to be a high class management institutes. While they might be able to do better if taken private, I am truly concerned that tuitions might rise exponentially in the absense of government subsidies. This will certainly prevent many deserving candidates from pursuing studies at the best Indian management schools. I am yet to see a persuasive proposal that will resolve inequity that might arise as a result of privatization of IIMs/IITs. Endowment building should precede any demands for complete autonomy.

    Secondly, Shivam point out nicely that there may be something wrong with the mindset that envisions setting up an IIM in Singapore when there is so much demand in India.

  3. Anonymous said...

    another point Abi. How exactly has the govt shackled managment education, given that any private sector person has the right to open a managment institutes? That none of them has been able to rival the IIM's is another matter, Arindam Chaudhuri's claims notwithstanding!

    My word verification was iipbrjg!

  4. Abi said...

    Shivam: In what I said ("You can get the public opinion (at least, that of prominent people such as Narayana Murthy) behind you"), where do I imply that "Narayana Murthy equals public"?

    Well, I wouldn't be so hard on the IIMs for their choice to open a satellite centre in Singapore. I can see many benefits accruing to the IIMs and their faculty. As for what 'such a mindset [will] do if the IIMs were to be private", you and I wouldn't care too much about it, would we? After all, I didn't choose to write about what S.P. Jain is doing.

    Anup: My view on tuition fee subsidies in higher education (and MBA is even higher than mere 'higher education') is that it is unjustified. This view is based simply on the fact that only a tiny minority gets to enjoy it and its fruits; currently, it's about 6% at UG level, and even smaller at a higher level. The payoff in getting an MBA at IIMs is so huge that banks would love to give you an education loan.

    Endowments are a different problem; our government does shackle our IITs and IIMs when it comes to building up their corpus funds. IIMs, for example, cannot build it to beyond 250 million rupees.

    Let us not talk about people's mindsets here, shall we? As I said, the IIMs are doing what they perceive to be good for them. Yes, in this particular case, it would have been nice if they had not chosen to go to Singapore. Yes, I think it's a bad move. But no, it doesn't mean that we can question their collective mindset.

    Shivam: Hi, again! The ToI editorial was about how the education system would flourish if only the government unshackled it. In this discussion, the editorialists sneaked in the bit about the IIMs, which irritated the hell out of me. I think the IIM thingy is not all that hot or important. The management education sector is probably the free-est of them all, but you are right: it doesn't seem to have done it a great deal of good.

    'iipbrig'? Google does have a sense of humour, doesn't it? ;-)