One way of looking at the notification on admission and fees of business management institutions put out by the All India Council for Technical Education (AICTE) last December is to view the sector regulator doing its job of protecting consumers’ interests (i.e. prospective students) from venal institutions that are cashing in on the growing demand for a B-school education. But, in addressing a problem that it has been responsible for, in no small measure, AICTE has overreached itself. So, it is not surprising that the issue now finds itself in court. Of the eight rules that AICTE has set out, two can be considered somewhat logical. The first stipulates that the admission for all management education courses cannot start before March 31. Most mainline B-schools begin the admission process in January, two months after the Common Entrance Test (CAT), one of the widely-used admission tests, in October, but others start later, depending on the timing of other entrance tests. Such staggered admissions allow students to make multiple applications and then get transferred to their preferred institution, if they can. A vacant seat cannot be filled once the term begins, so the upshot is that a large number of seats go abegging each year.
AICTE is also probably correct in attempting to limit B-school fees. B-schools may argue, as they have done, that this amounts to unwarranted interference in their autonomy. But it is also true that soaring demand is putting a B-school education outside the purview of many less affluent students, and has promoted such frankly unethical practices as capitation fee. This has the effect of creating an uneven playing field for talent that is unlikely to help India Inc. But, in stipulating that fees be subject to a state government-led fee fixation committee, AICTE has come up with a sub-optimal solution. Experience has shown that state government interference in education tends to become so politicised as to verge on the destructive. It would probably make more sense for a centralised fee-fixation committee, comprising representatives of the regulator, B-schools, industry and educational professionals, with a clearer idea of balancing costs and quality.
But these are only two issues that irk the over 2,000 B-schools that seek AICTE approval. The most contentious one is the stipulation that their admission tests be limited to CAT, MAT or an equivalent state-level test. This amounts to gross over-regulation. More so, since only the state-founded IIMs and about 150 privately-run B-schools actually use CAT; the remaining 1,900-odd institutions use a variety of tests, including those designed by XLRI and AIMA, all of which will have to be scrapped. Even assuming that this is done, with CAT now a computer-based test delivered by a private sector player, the danger of monopolisation cannot be an overstatement. sync with B-school functioning. For an institution that has played such a laissez faire role in approving B-schools of dubious quality, its guidelines appear to be designed to irk rather than enable institutions to focus on quality.