The Hindu Business Line : Freedom to price

Even in the days of repressed managerial remuneration, the fees charged by these B-schools over two years were at least equal to about six months salary of the average fresh graduate.

Indian Institutes of Management have at last managed to effect an increase of 10-15 per cent in tuition fees. This surely is more of a signal rather than economic value. On the heels of the sharp increases in the salaries offered to their graduates, the actual increase itself is forgettably meagre. Adjusted for inflation, it is perhaps hardly any increase at all. Yet it is one more step in the direction of a more logical policy in managing higher education, consistent with a liberalised economy. Certainly, we have moved far from a few years ago, when the Central government seemed determined to reassert its proprietor's control over these State-promoted institutions. Far from a well-justified increase, the move then was in the opposite direction, reducing fees to ridiculous levels. It is admitted on all hands now that the quality of the graduates is even better than the best from the American B-schools. The young managers have met with enthusiastic response from the corporate world here and abroad, reflected in Indian starting salaries ranging Rs 6-11 lakhs, not to mention the astronomical numbers of dollar salaries converted into rupees.

Full employment and excess of demand over supply of the graduates of the IIMs are now well-established facts. It is but reasonable and logical to expect the cost to the state of providing the education to bear some relationship to the benefit to the economy from it. It is worth remembering that even in the distant days of repressed managerial remuneration and socialistic control, the fees charged by these business schools over two years were at least equal to about six months salary of the average fresh graduate. In today's terms, therefore, there is a good case for the two-year total fees to be somewhere in the region of Rs 4-5 lakhs, at a conservative estimate. There is no reason why the public or the exchequer should bear the cost of the education of an emerging economic elite. As always, it must be possible, of course, to look after the needs of the indigent and deserving through scholarships and indeed pay for them through the more `market-based' price charged to those who can afford to pay. It is interesting in this context to look at creative solutions to this issue. The schools run by the Krishnamurti Foundation, for instance, offer well-off parents the option of paying more than the stipulated fees if they wished to — and many willingly do, even 50 per cent more, evidence that a flexible and non-doctrinaire approach can bring socially beneficial consequences. Those at the opposite end of the scale are meanwhile simultaneously offered the benefit of scholarships. In the effort to make education accessible to all, regardless of ability to pay, management education ought not to be under-priced, lest it should become under-valued. Along with the recent decisions regarding freedom to open overseas centres, one hopes this brings sensible attitudes to freedom as well as quality in education.

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