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Home > Business > Special

Learn to develop, the IIM-Calcutta way

October 11, 2007

The Indian Institutes of Management (IIMs) and of Technology (IITs) that constantly moan about government interference as a barrier to growth and development may have an indigenous "case study" to the contrary in the IIM at Kolkata.

The management committee of the 46-year-old B-school said it will invest Rs 100 crore (Rs 1 billion) over the next three years to expand and remodel the campus to accommodate 25 per cent more students.

The plan is an elaborate one that includes hiring Christopher Charles Benninger Architects, the reputed American urban development planner who has worked in India for three decades.

The two-phase plan includes initially restructuring the campus and expanding hostel and executive facilities to house 163 more students and 150 more executives (who attend the management development programmes). Later, a shopping centre, parking lot and entertainment zone are to be added.

The point about this energetic overhaul is that it seems to have maximised - as all good businesses should - the autonomy granted to the institute by the government.  The IIM at Ahmedabad also responded to government pressure and expanded its facilities, using vast tracts of empty land that had been unused for decades.

It is difficult to understand why other IIMs and IITs, with similarly large tracts of land and the ability to mobilise other resources, can't do the same. After all, the government is hardly likely to impede plans to expand student intake or protest against improved facilities. 

More so when the funding is being generated from internal resources and corporate and alumni sources rather than the exchequer. In this, the IIM at Kolkata is drawing on the best practices of US B-schools like Harvard, Stanford and Wharton that command huge sums of money, almost entirely from the private sector.

This in turn creates a virtuous circle of quality enhancement since private investors constantly demand a tangible return on investment - either in terms of the research being conducted or the academic reputation of the institute. 

Low student intake by the IIMs has been a legitimate and long-standing government complaint. So it is hard to believe that even Arjun Singh will complain if the IIMs leverage the fund-raising capabilities at their disposal to expand facilities and accommodate more students.

This is surely a more cost-effective expansion programme than setting up newer IIMs of doubtful quality that dilute the brand equity of India's premier B-schools. There is no doubt that despite their reputations for producing world-class graduates, the six IIMs could also do much more in terms of expanding the number of students they admit.

In 2006, the IIMs collectively admitted just 1,200 students from 195,000 who took the Common Entrance Test, making it one of the world's most competitive tests.

In fact, with a "hit rate" of less than 1 per cent, it is not surprising that government demands for higher reservations for scheduled castes and tribes and other backward castes - currently 23 per cent - become a major pain point.

As the IIM at Kolkata has shown, it is possible to make the most of its own resources and capabilities to fulfill a much-needed agenda. Given that the IIMs - like the IITs - are showpieces of public investment, they are unlikely to ever be free of government supervision, which today is largely limited to making one or two key appointments.

It should be possible for these institutes to leverage the substantial element of autonomy that all IIM managements have to significantly enhance both the quantity and quality of their products. Complaining about lack of autonomy or demanding more of it should not become a fig leaf for lack of action.

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