The IIM-MoHRD tussle has reached a critical point. The Ministry of Human Resources Development (MoHRD) has scored an apparent victory in that it has forced Indian Institute of Management, Ahmedabad, (IIM-A) to reduce tuition fees with a promise that MoHRD will make good the shortfall by additional grant.
What the MoHRD has achieved by this for the poor in India is not clear. In fact it would seem that this is taking money from the taxpayers and giving it to the rich or potentially rich IIM-A students.
The bulk of the taxes in India are collected through indirect taxes that are in general regressive.
If you tax only the luxury goods, you collect very little as the total volume is too low. If the tax rate is kept high, it is evaded. So you have to tax goods of mass consumption to raise sizeable revenue. Per force you tax the poor.
So what the MoHRD has accomplished is to transfer money from the poor to the rich. Obviously this could not have been the motivation of the MoHRD. Possibly, the MoHRD just did not like that the IIM-A was becoming less dependent on the Government and it wanted to increase government control for whatever reasons.
Thus it was surprising that it also promised the Supreme Court not to interfere in the IIMs' autonomy. Perhaps this promise was not meant to be kept but now the Supreme Court has called the bluff, if it were a bluff. It has asked the government to specify what it means by this promise.
What should be the content of autonomy of an educational institution like IIM-A? Autonomy should also go together with accountability. In what ways institutions of higher education should be accountable? The autonomy needed is related to accountability.
IIM-A is accountable not just to the government for the money it gives but also to the students, to its faculty, to the profession, to industry, to its alumni, to its other donors and to the society at large. The autonomy needed should flow from these accountabilities.
IIM-A is accountable to its student for providing quality education. There is an implicit promise of a certain quality of education. IIM-A must do whatever it takes to fulfil this most important obligation. Quality of education depends on content and effective delivery.
Thus IIM-A should have the autonomy to decide on the number and type of courses as well as on the content of the courses. There is no danger here that such autonomy would be misused. Faculty members are very passionate about these matters and usually decision on them involves long and sometimes tiring discussions.
IIM-A should also have the freedom to set the standard of performance it expects the student to meet. This is also a matter best left to the faculty.
To decide on the course content, on what to teach, and to teach effectively, one needs high quality faculty. The course content should also be kept up-to-date and relevant. This also calls for faculty that engages itself in research and consultancy.
So the first freedom IIM-A must have is freedom to recruit faculty, to attract and retain first-rate faculty and to provide it an environment in which the faculty keeps its knowledge up-to-date. To attract high quality faculty one needs to provide good emoluments.
This means IIM-A should have the freedom to define the salary and working environment. Since salary structure in India has been rigid (why it should be so is not clear, but let us take it as a given fact), institutes like IIM try to provide other facilities.
Typically, faculty is allowed private consultancy for one day a week. A part of this consultancy fees are given to the institute. Such consultancy, for an institution like IIM serves many purposes. It gives additional income to the faculty.
It benefits business, industry and society. It keeps the faculty engaged in and aware of the real life problems of the country. The faculty can develop case studies that are relevant and real so that the content and the quality of education improve.
With such autonomy should come some accountability. A faculty member should be evaluated on her performance. This can be assessed by looking at the number of case studies developed, the number and quality of publications, the number of research students guided and student evaluation of teaching.
Promotions should be based on an assessment of these among others. This is also in the interest of IIM faculty itself. The reputation of an IIM faculty member depends on the value of the brand name. If an institution makes every one a Professor, the value of that professorship goes down.
Thus incumbent faculty members of reputed institutions have high personal interest in retaining the value of the brand name. They jealously guard it. Thus as a part of its accountability to its faculty, IIM must have meritocracy in promotions.
Performance assessment is however necessarily subjective and cannot be reduced to a formulae. One therefore needs to design processes that are transparent and that minimise subjective bias by taking opinions of a number of outside experts.
The quality of IIM graduates depends on the quality of students admitted to the course. Every institution would like to attract the best and the brightest. IIM therefore should be free to decide on whom to admit. Of course it has to be accountable to do this in a fair and transparent way.
IIMs' accountability to their alumni is to maintain standards and value of the brand name. Industry would also want to be assured of the value of an IIM graduate.
Finally, the IIMs' accountability to their donors including the government is to ensure that the money given is spent for the purpose for which it is given and it is spent wisely. Such accountability should not be the typical procedural accountability that is generally required by government, but should be performance accountability.
IIMs, unlike many other academic institutions, produce a marketable product, so their performance can be easily assessed. As long as IIM-A retains its brand value, as long as it remains the most sought after institute, as long as it produces graduates who command high market value, the donors have got their money's worth.
An audited statement of account should do to tell them if there is any diversion or misuse of funds. Even here the best thing that the government should do is to give untied grant linked to the number of students admitted and the financial aid provided to students.
To sum up, IIM-A should have the autonomy (a) to decide on course structure, course content, performance standards, and admission of students and (b) to recruit faculty, to set its working conditions in terms of salary, consultancy privileges, teaching and other obligations and decide on faculty promotions.
Its accountability should be to continue to produce graduates that meet the market test with obligation that admissions are based on merit and financial aid is based on need. It should follow transparent processes in admissions, recruitment and promotions, but not necessarily rigid rules. Some flexibility based on principles should guide the processes.
Its board should remain independent and should oversee its functioning. Its accountability to the government should be only confined to the number of students it admits and the financial support it gives to the needy.
The writer is Chairman Integrated Research and Action for Development, New Delhi and Professor Emeritus and Former Director Indira Gandhi Institute of Development Research, Mumbai.
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