The HRD minister has perhaps for the best motives sharply reduced the fees for postgraduate management education. He claims support from an unpublished report by a Committee under the Chairmanship of Dr U R Rao.
Dr Rao has said that their report does not deal with IIMs and IITs but with the hundreds of other institutions in technical education, a term that includes engineering, architecture, computer sciences, management and others.
At the same time Dr U R Rao sees nothing wrong with the reduction in fees since the government has announced that it will make up the shortfall.
There is a neglect of the Indian fiscal position in this comment. Government does not have unlimited resources.
In any case, it needs to prioritise its expenditures. The debate over IIM fees has diverted attention from the more basic issues in management education.
Much has been written about the availability of scholarships and bank loans to management students and especially those who have gained admission to the IIMs.
Yet not all scholarships are taken. No data is available about the community, caste and economic class origins of the students.
The problem is that bright young people from socially and/or economically backward classes have poor confidence in their ability to compete in English and lack the social skills of the young from the more developed social and economic classes.
If the government has funds it should scour the country for bright young graduates and give them remedial training to improve their confidence so they perform well not only in the written admission tests but also in the interviews.
The business community is willing to pay high salaries to management graduates and especially those from IIMs. Parents are therefore willing to beg, borrow and even steal to raise the funds to give their offspring a management education.
If fees are reduced to the levels the minister desires, we will be in the classic price control situation (steel, cement, sugar, vanaspati, cloth, etc) that we came out of in the 1990s.
In each case price control and dual pricing led to black markets and under-the-table payments. Lower fees and few seats will damage the integrity of the admission process, an essential condition for ensuring that the best and the brightest enter the IIMs.
The minister therefore wants to substantially raise the intake into IIMs. He does not accept that the quality of IIMs depends on the interaction between students and faculty.
This is likely to be jeopardised if there are many more students without raising faculty and infrastructure. It still does not improve the overall quality of management education in India.
Since India does need many more management graduates we need instead to have more courses for specific sectors. Some neglected ones today are organisations in arts and culture (museums, galleries, etc), non-government organisations of which there is a large number today, cooperatives, and many others.
These sectors do not offer the high salaries that industry is able to do. Students will need support to pay tuition, boarding and lodging to go through the courses. If government has the funds it would be better advised to give it for creating and supporting such courses.
The government has, over the years, performed its duties as regulator of management schools very poorly. There are 950 AICTE-recognised schools producing approximately 70,000 graduates a year, the largest after the US.
However, only 45 are accredited through the National Board of Accreditation which says much for the overall poor quality.
The AICTE has succumbed to pressures from well-connected promoters and been induced to recognise such a large number over the years without having the ability to inspect them regularly and ensure that they have the required and qualified faculty.
Many recognised institutions have non-existent libraries, poor computer availability, faculty that is quite unsuited for the work, high fees and poor industry linkages. The AICTE has rarely de-recognised such institutions.
The government should make AICTE an independent regulatory body that functions transparently and has as members people who have the courage to ensure that standards are maintained.
For this the AICTE will need far more funding than the present limited budgets that the HRD ministry asks for and gives to it. If government has the funds to reduce IIM fees it should first give higher priority to funding the regulator.
AICTE has a Board of Management Studies that has little power. This Board should have three full-time independent members, preferably from industry, and the best academics and have the teeth to take decisions and set penalties.
This requires funds that the HRD Ministry has not till now been able to provide. There are far too many admission tests for management education. They impose a heavy burden on young students who have to appear for many tests to ensure that they get admission in some institution of their preference.
These tests make a tidy profit for the state governments or private institutions that run it. But that is no reason for letting students be so over burdened. This, like many other issues, is far more important for management education than the fees charged by IIMs.
Students have little academic information about the quality of the many management institutions and the facilities they provide. What is generally available is the placement record, when it is good. AICTE has the data but it is not freely available to students so that they can make a rational choice.
The comprehensive data should be updated and published for all institutions each year. This requires funding. Many publications publish ratings of management schools.
From the number of advertisements from management schools in those issues, the ratings are done to earn money for the publication, not to help students make sensible choices.
If the government has surplus funds it should commission an independent body to do an annual rating and ask all institutions compulsorily to participate.
Another important and neglected issue is about the values imparted by management education to the best and brightest among the youth of the country. This is the supremacy of earnings over anything else.
Students, faculty and employers judge management institutions on the basis of whether students get jobs, how quickly, how many offers each one gets and what is the starting salary.
The content and quality of what is taught is not regarded as important. If bright young people can think only of earnings, is it likely that they will have much concern about society when they are older?
It is unfortunately true that there is little original conceptual or applied work that is produced by the over 5,000 management teachers in India.
Yet Indians are the management gurus of the world: C K Prahlad, Sumantra Ghoshal, Krishna Paleppu, Nitin Nohria, Jagdish Seth and many others are in demand by the largest companies all over the world.
However, they work outside India. Indian teachers in India do not have comparable reputations. It is easy to become a professor in a management institute in India. There is little pressure to conduct and publish original research and cases. There is also little funding available for the purpose.
If government has the funds it should spend them on upgrading the skills of faculty through regular training, testing, funding for research and case writing. Indian managers live one life at work and another at home.
Professional management as it is taught demands rationality and objectivity, not emotion, sentiment, family feeling, even superstition. Can we find a way in which Indians are taught management concepts that are congruent with their cultural contexts of society, culture, etc?
Can we teach them the reality of Indian markets with differential development of consumers so that the poor are a large mass of consumers?
Can we not undertake a massive case writing and teaching programme so that Indian experiences are studied in the classroom? All this needs funding and if government has it, the money should be spent on making the management curriculum relevant for India and India in the world.
Management education has developed well in India thanks to the vision of past governments that set up IIMs as role models.
Now we must consolidate and get the many institutions that exist to upgrade their standards so that students get something of value apart from their own inherent quality. Government needs to find money for this purpose. IIM surpluses could well be used for this.
The author is a former president, AIMA; and chairman, Institute of Social and Economic Change.
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