B-school Autonomy: It’s Complicated

Despite the Narendra Modi government’s keenness to promote quality institutions, a systemic problem refuses to go away. Some 500 PGDM (Post Graduate Diploma in Management) institutions say a 2010 AICTE (All India Council for Technical Education) order is hurting their performance by curbing their academic, administrative, and financial autonomy.

These institutions argue that they rank in the top bracket of B-school listings, but if they are not allowed to function autonomously, the quality of the education they provide could be affected, and some may even be forced to close down.

Worse, the government may soon take a call on capping annual fees at the AICTE-approved institutions, after the B. N. Srikrishna Committee recently suggested such a limit for MBA (and PGDM) institutions. The committee recently submitted its report to the AICTE, which in turn forwarded it to the human resources ministry. Top AICTE officials told BW Businessworld that the Srikrishna Committee recommendations seemed “quite reasonable”. According to the committee’s recommendations, management institutions (including PGDM) will have to charge no more than Rs 1.8 lakh a year for their programmes.

Many top B-schools that offer PGDM programmes say this would sound the death-knell for them, as they survive in a fiercely competitive market, and the amenities they provide to students depend on the fees they charge.

“We are autonomous, self-financing institutions, attracting students from all over India. We offer world-class facilities, hostels, and placements. How would all this be possible if a restriction of this nature is imposed on us?” says R. C. Natarajan, director, TAPMI.

The AICTE’s 2010 order, which the PGDM institutes describe as “draconian”, said that the CAT, MAT, or state government-conducted exam would be the entry point for AICTE-affiliated institutes. A model curriculum would be issued by the council. AICTE has also said admission to PGDM programmes must be conducted by state governments through a competent authority. The regulator has suggested that fees to be charged for the PGDM programmes be approved by a committee of state government representatives. It has said the governing boards of PGDM B-schools should have five government invitees.

PGDM institutions say this would be a direct infringement of their rights. They say tests such as the MAT are lacking in academic rigour, and admissions via state governments are unacceptable. “The 2010 AICTE order is like taking education back by a 100 years. They wanted us to get affiliated to some local universities and then run the MBA programme. That would have destroyed the character of our overall programme,” says New Delhi Institute of Management chairman V. M. Bansal.
The AICTE, however, had its own logic for the order. S. S. Mantha, who was its director at the time of the order, says, “We were getting lots of complaints about many of these institutions. Also, is it tenable to start a PGDM college without the state government coming into the picture? Then, there were issues like reservations not being followed. Also, several engineering colleges wanted to run PGDM-like institutions. All the functions of the university were supposed to be done by the AICTE. We therefore came out with the 2010 order in consultation with the government.”

The PGDM institutions moved the Supreme Court and got a stay on the order. They institutions say they have been getting yearly stays thereafter. But AICTE says its order has not been entirely dismissed. For instance, there was a problem with all institutions conducting their own exams, and the AICTE argued that the fewer the entrance tests, the better it was for students. The Supreme Court said students could use any of five tests — CAT, XAT, MAT, ATMA, and CMAT — for admission to PGDM institutions.

The PGDM institutions, meanwhile, have been running from pillar to post to protect their autonomy. They have petitioned human resources ministers from Kapil Sibal to Smriti Irani.

“Five hundred well-known Indian B-schools, such as XLRI, SPJIMR, MDI, IMI, IMT, TAPMI, Somaiya, Bimtech, and Jaipuria, are facing difficulties in serving the economy for the last five years, due to the AICTE’s draconian notification issued in 2010,” says H. Chaturvedi, executive president of the Education Promotion Society of India (EPSI) and director of Bimtech. He also adds: “It has withdrawn academic and financial autonomy, and imposed restrictions on these B-schools, which goes against the talent needs of ‘Make in India’ and ‘Skilling for India’. Education consortium EPSI appeals to HRD Minister Smriti Irani to intervene.”
“We have made representations to the AICTE chairman as well as the HRD Minister. We want complete withdrawal of the 2010 order so that we have complete autonomy in all matters,” says XLRI director E. Abraham.

The AICTE may be an easy target for PGDM institutions, but the regulatory authority is also fighting another battle that questions its very raison d’etre. A case is being heard in the Supreme Court to ascertain whether the council is an advisory body or a regulatory one.

suman@businessworld.in; @skjsumankjha

(This story was published in BW | Businessworld Issue Dated 14-12-2015)