Kapil Sibal’s bill will kill the IITs and IIMs

Union HRD minister Kapil Sibal is about to destroy an important national legacy: the IITs and IIMs that have made Indians world beaters in tech and management. His foreign universities bill, if passed in its present form without reforming the Indian system of governance, will lead to the ruin of not only the technology and management institutes, but all government-run academic institutions of repute.

Let us first make a digression here before we come to the specifics. Five years ago, BSNL was India’s biggest and most valuable telecom company. Today, it is an also-ran and will soon become an artefact of history. Five years ago, Air India and Indian Airlines ruled the skies. Today, the sky has fallen on their heads. As a merged entity, they have become the government’s biggest basket case. Ten years ago, ONGC and Indian Oil were India’s oil kings. Reliance was nowhere. Today, ONGC has been robbed of profits and Indian Oil is a pale shadow of its former self. The latter survives on government handouts and subsidies.

Where is the connect with Sibal’s foreign universities bill? Here it is: opening up without giving equal autonomy to domestic institutions is a recipe for disaster. The private sector will use the Indian system of bribing ministers to hold back the domestic companies or institutions while they themselves grow in size and stature. Nobody will bat for the public sector and, soon enough, they will live up to the image of inefficiency and sloth.

What happened to the BSNLs, Air Indias, and Indian Oils will now happen to the IITs and IIMs. Consider what’s wrong with Sibal’s bill. The entry norms specify a minimum corpus of Rs50 crore, regulation (but no ceiling) of fees by the UGC, non-remittance of profits from educational activities, and a possible exemption from SC/ST quotas.

While one is not sure if this is going to attract the Harvards and Yales of the world, the point is different: which Indian public institution has even this freedom? Will the government allow the IITs to set their own fees for regular students, thus allowing them to subsidise the SC/ST candidates and the poor? Will the IIMs be allowed to enforce affirmative action in their own way without being forced to admit poor quality students in the name of quotas?

The IITs and IIMs are anyway unable to attract the best faculty. What will happen when the foreign institutions come here and offer their own salary packages to the best remaining professors? Who will teach at the IITs? Just the dregs?

To be sure, the IITs and IIMs are what they are because of their selection procedures, which weed out all but the brightest. This automatically allows them to push out great products who command good salaries. The best that can be said about the bulk of their current faculty is that they do not subtract value from the great raw materials that pass through their portals.

The entry norms will ensure that the second-rung institutes will come in first, and not the best. They will do damage to IIT/IIM faculty even while not doing much to create great, new institutions. And when one says IITs/IIMs, one means all government-controlled institutions of excellence, including the IISc in Bangalore, the NID in Ahmedabad, the various regional engineering colleges, or JNU, for that matter. They will be denuded of their best and brightest in due course.

This is not to say that foreign institutions will have an easy time, or will remain free from government meddling. The foreign universities bill, for example, expects them to be set up under section 25 of the Companies Act, which covers non-profit institutions. But will that really happen? When land is controlled by the state, most states will insist that foreign universities should register under the charity commissioner to be entitled to cheap land — a prerequisite for a great campus. Once this happens, why would the state governments not want to meddle with them?

The first fallout of the foreign universities bill is that we will largely get second-rung institutions since they are the only ones who may be willing to tie up with dubious entrepreneurs with murky local connections in the states. But even they will denude our national institutions of quality staff and students, leaving the IITs and IIMs defenceless.

The only way to allow foreign universities to enter India is to give the IITs and IIMs complete autonomy and freedom. They should be allowed to operate on the same terms and conditions as the foreign universities. They should have the option of going private. But will our political establishment accept this when they can interfere at will now?

This is why Sibal’s bill will kill the IITs and IIMs. He has put the cart (opening up) before the horse (levelling the field for local institutions).