Financial Daily from THE HINDU group of publications
Thursday, Feb 26, 2004
Industry & Economy
Scholarships mooted for IIM studies
THE IIM-A TRIO: The Chairman and Chief Mentor, Infosys Technologies, Mr N.R.Narayana Murthy, the visiting professor and management consultant, Ms Rama Bijapurkar, and the HLL Chairman, Mr M.S. Banga, at a press conference in Mumbai on Wednesday. -- Paul Noronha
Mumbai , Feb. 25
SCHOLARSHIPS and easy loans are a better option to make management education at IIMs more accessible, according to senior corporate leaders.
Reducing fees at IIMs to Rs 30,000 per annum will not necessarily make these institutions accessible to the poorer sections of society. A fee pegged at this level would still be unaffordable to a student whose parental income is less than Rs 1.5 lakh per annum. This was the message of a panel comprising Mr Narayana Murthy, Chief Mentor, Infosys Technologies, and a board member at IIM (A); Mr M.S. Banga, an IIM (A) alumnus and Chairman, HLL; and Ms Rama Bijapurkar, a visiting professor at the institution.
What was needed, instead, was providing full scholarships to students who were unable to afford the current fee. Alternatively, students could be offered easy loans. Importantly, these financing options should be prominently advertised, they said at a press conference here on Wednesday.
Mr Narayana Murthy said, as a student in the 60s, he faced a similar situation when he was told by his father, a school headmaster, that the fees at IIT (Rs 75 then) were beyond his means.
Stressing on a provision of scholarships and loans, Mr Banga said the current fee reduction was "unnecessary and retrogressive." Admissions to the IIMs, he said, were totally "need-blind."
In fact, at a fee of Rs 1.5 lakh, each student at IIM (A) was subsidised to the extent of Rs 2.5 lakh as the actual cost of training a student at the institution was about Rs 4 lakh. A comprehensive review conducted about 10 years ago had, in fact, recommended enhancing IIM (A) fees so that the institution could become more self-reliant. In an effort to enhance its revenues, IIM (A) was conducting several management and research programmes.
Mr Banga also said there was a need to set up more IIMs to meet the huge demand for admissions. Currently, about 1.5 lakh students apply for 1,500 seats in IIMs across the country.
For its part, the Government could allocate its scarce resources on providing universal primary education, rather than subsidise IIMs for the revenue shortfall expected on account of the proposed lower fee structure.
Mr Banga added that last year, about 80 per cent of the student intake at IIM (A) was from middle- and lower-income group families.
According to Ms Bijapurkar, IIM (A) was not only a premier management institution but also one with a strong social responsibility. It has designed and run hospital management and training programmes for school principals and teachers, among others.
Mr Narayana Murthy also pointed out that the average salary negotiated by students passing out from IIM (A) last year was around Rs 8.2. lakh per annum. Repayment of a loan drawn for the education would, therefore, not prove a problem.
Mr Banga pointed out there were three stakeholders in the IIM (A): the Government of India, the Gujarat Government and a group of corporate bodies. There was need for a wider debate on the subject. A decision taken today would have repercussions over the next 15-20 years, he cautioned.
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