Will staggering cuts in IIM budget impact India's premier b-schools?

Will staggering cuts in IIM budget impact India's premier b-schools?

Experts assess that halving funds could pose a larger problem for the six new or baby IIMs which have been set up by the centre after 2015, rather than the second-generation IIMs that were established in the 2010s or the first-generation IIMs that preserve a near 50-year legacy.

Aditi AlurkarUpdated: Thursday, February 02, 2023, 12:00 PM IST
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This fall in the grant comes after the Common Admission Test(CAT) 2022, the gateway to IIMs, recorded a 12% rise in the number of registrants with nearly 2.22 lakh candidates appearing for the exams. |

Mumbai: Indian Institutes of Management(IIMs) which often find themselves in the upper crust of all business schools in the country are faced with a staggering cut in this budgetary session. The funding for these institutes was brought down to Rs 300 crore from the previous fiscal year’s revised estimate of Rs 608.23 crore, a 50.67% drop, even when the net budget for the fiscal year 2023-24 rose by 8% amounting to Rs 44, 094 crores for the higher education sector.

Major IIMs safe from repercussions

Experts assess that halving funds could pose a larger problem for the six new or baby IIMs which have been set up by the centre after 2015, rather than the second-generation IIMs that were established in the 2010s or the first-generation IIMs that preserve a near 50-year legacy.

“IIM Calcutta has never relied on any government grant. We generate our total revenue on our own where 35% comes from training programmes that are both, remote and on campus. The 65% chunk comes from the tuition fees we charge. Though old IIMs like IIM-C will face practically no change, this budget cut is not a good sign as public money must be spent on education. The new IIMs might suffer after this change,” said Manish Thakur, the Dean of New Initiatives & External Relations at the Indian Institute of Management, Calcutta.

Move can create level playing field, build entrepreneurial mindset

Others believe that the cut in grants might lead to a level playing field for other private business schools, which receive no support from the government despite ranking among top business schools. “IIMs already have land and infrastructure laid out by the centre. Grant cuts should not pose such a problem as IIMs should be self-sustaining bodies with the kind of fees they charge and the type of placements they provide to their students. Government consultancies also keep approaching IIMs as these are considered to be a part of the system,” said Dr. Vishwa Ballabh, Professor of Economics at XLRI Jamshedpur.

The fees for the new generation IIMs range between Rs 15-18 lakh for their two-year MBA course while the old IIMs charge 20-30 lakh for their two-year post-graduate programme. The trend of becoming self-reliant is what the new IIMs might have to adapt to, say industry experts. “The centre must have a firm commitment towards the higher education institution. Yet, this decision might result in IIMs becoming completely entrepreneurial to sustain themselves amidst these cuts, given that there are sufficient policies to allow it. The newer IIMs might even have to rely on donations and grants from other sources,” said Prof. Debashis Chatterjee, Director of IIM Kozhikode.

This fall in the grant comes after the Common Admission Test(CAT) 2022, the gateway to IIMs, recorded a 12% rise in the number of registrants with nearly 2.22 lakh candidates appearing for the exams. Engineers continued to top the management exam accounting for 74.5 percent of the top scorers.

Indian Institutes of Technology (IITs), National Institutes of Technology, and Indian Institutes of Information Technology(IIITs), centre’s engineering colleges, continue to witness a steady rise in budget allocation, in contrast to the dip witnessed by IIMs.

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