Lower IIM fees may keep out foreign schools

Rattled by criticism from N R Narayana Murthy, chairman of the Indian Institute of Management (IIM), Ahmedabad, of his ministry's decision to reduce fees charged by the institutes, Union Human Resources Development Minister Murli Manohar Joshi is learnt to have come up with "swadeshi" reasons to justify the move.

Joshi is marshalling the argument that his move is aimed at pre-empting the entry of foreign business schools in India. India is committed at the World Trade Organisation (WTO) to open up education to foreign institutions. That the argument will find favour with Joshi's mentors in the Rashtriya Swayamsevak Sangh is a foregone conclusion.

Sources in the human resources development ministry said Joshi was under constant pressure for the past five years to open up education to foreign institutions.

"He could not have delayed the entry of foreign business schools much longer," the sources said, adding that lower fees in premier institutions like the IIMs would act as a deterrent to foreign educational institutions. "They will be unable to come here and charge such low fees," the sources said.

The human resources development ministry clearly did not anticipate the hostility shown by Narayana Murthy. "It (the slashing of fees) is a retrograde and ill-advised move. It is not based on data and facts. It is not based on reason and logic.

I am totally unhappy with the decision taken by the HRD ministry to slash tuition fees. I had discussions with the minister on January 14 and sent more points on January 29.

None of the points that I had raised has been taken into consideration by the ministry while taking the decision. It also doesn't make sense that the decision has been announced even before the Shunglu Committee, which is looking into the finances of the IIMs, has announced its report," Murthy said in Bangalore yesterday.

But human resources development ministry sources said Joshi had considered all the points raised by Narayana Murthy before taking the decision. On January 31, Joshi called a meeting of all directors of IIMs to discuss with them the changes in the fee structure.

The sources also said Joshi appeared to have found fault with Narayana Murthy's insistence that the IIMs at Ahmedabad, Bangalore and Kolkata be allowed to maintain reserves like American business schools. In the minister's view, this is unacceptable and the reserves must be used for development of infrastructure.

By implication, the ministry sources said, the government's next step would be to force the IIMs to spend about Rs 48 crore of their accumulated reserves for the development of facilities in the institutes.

Taking the argument further, Murthy had said: "It costs Rs 300,000 per student per annum at IIM-A and, obviously, Rs 300,000 is not a pittance. If you want good quality education, you have to spend Rs 300,000."