The three big Indian Institutes of Management -- at Ahmedabad, Bangalore and Calcutta -- have requested the human resources development and the finance ministry to provide more funds for the younger IIMs.
Additional funds will mean that the institutes can have a larger corpus and also extend scholarships to more students.
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The proposal, which was initiated by the bigger IIMs during a meeting with former Human Resources Minister Murli Manohar Joshi in New Delhi few months back, has been forwarded to ministry officials. The suggestion has also been brought to the notice of Finance Minister P Chidambaram for his approval.
"Since IIM-Ahmedabad manages a corpus of around Rs 98 crore (Rs 980 million) and IIM-Calcutta and IIM-Bangalore have a corpus over Rs 85 crore each (Rs 850 million), these institutes earn a hefty interest of around Rs 8 crore (Rs 80 million) per annum from the funds. While IIM-Lucknow has a corpus of around Rs 15 crore (Rs 150 million), IIM-Indore and IIM-Kozikode have even lesser corpus," said a source in IIM-Ahmedabad.
An increased non-Plan grant from the finance ministry from this fiscal would help the institutes become financially self-dependent over the next few years, the source said.
"The proposal has been forwarded as one of the few suggestions given by the bigger IIMs to the human resources development and the finance ministry, and a note of approval now is being awaited. IIM-Lucknow, IIM-Indore and IIM-Kozhikode have agreed to the proposal as it will help them to grow faster. After a few years, they will be in a position to run the show minus the non-Plan grant from the government," the source said.
The matter was discussed at the finance committee meeting of IIM-Ahmedabad on Monday but director Bakul Dholakia denied to comment on the issue.
However, sources said IIM-Ahmedabad had already done the arithmetic on whether it could operate without non-Plan grant from the government.
"Similar exercises also have been done for IIM-Bangalore and IIM-Calcutta and those were put up for discussion during the six directors' meet held in Ahmedabad on Sunday. In fact, this proposal has helped the bigger IIMs to convince the younger IIMs to agree with the proposal of maintaining status quo in fees," said a source in IIM-Lucknow.
The bigger IIMs have been witnessing a steady erosion in the allocation of non-Plan grant over the last three years as IIM-Ahmedabad, which received Rs 11.82 crore (Rs 118.2 million) of non-Plan grant during 2000-01 and Rs 11.83 crore (Rs 118.3 million) during 2001-02, got only Rs 8 crore (Rs 80 million) during 2002-03.
The institute, however, has not received any non-plant grant during the last fiscal year and similar was the treatment for IIM-B and IIM-C. IIM-C, which received Rs 11.82 crore (Rs 118.1 million) as non-plan grant during fiscal year 2000-01, was allocated Rs 11.83 crore (Rs 118.3 million) in the next fiscal year but in the year 2002-03, the institute received only Rs 5.53 crore (Rs 55.3 million), less than 50 per cent of the fund it received in the previous year.
Even IIM-B also witnessed similar erosion in grant of funds by the earlier government as against a non-plan grant of Rs 9.36 crore (Rs 93.6 million) it received in 2000-01, IIM-B received only Rs 9.40 crore (Rs 94 million) in 2001-02 and in 2002-03, it received only Rs 4.57 crore (Rs 45.7 million).
Like IIM-A and IIM-C, IIM-B also has not yet received grant on this account for the last fiscal year.