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Bad news for IIMs in Udaipur, Ranchi, Raipur! Govt refuses to offer additional funding

All these new IIMs, excluding IIM-Ranchi that is in initial stages of construction, are in the last leg of their construction. Addition funding have boosted this work, but now they are in a fix.

twitter-logoBusinessToday.In | November 16, 2018 | Updated 18:05 IST
Bad news for IIMs in Udaipur, Ranchi, Raipur! Govt refuses to offer additional funding

The Human Resource Ministry has stopped additional funding to six new IIMs (Indian Institutes of Management) as the government wants the autonomous institutes to be self-sufficient. The six new IIMs, including IIM-Rohtak, IIM-Tiruchirappalli, IIM-Raipur, IIM-Kashipur, IIM-Udaipur and IIM-Ranchi, were commissioned in 2008-09, when the UPA government was in power.

These six IIMs were given Rs 333 crore each for building permanent campuses. The funds were allocated in 2008-09 but the construction started in 2014 only. Now the government says these institutes will have to bear any further cost by themselves. For this, they can take loans, use their resources, and by offering consultancy services. All these new IIMs, excluding IIM-Ranchi where work has just begun, are in the last leg of their construction. Additional funding from the government could have boosted their construction work, but the government's refusal for more money has put them in a fix, reported the Economic Times.

A major reason these institutes need additional funding is that they have exhausted the entire budget by expanding construction plans, which have raised the overall cost of these projects.

The government had notified the IIM rules by implementing the IIM Act, 2017, which offered the autonomy to these premier business schools. The Act came into effect on January 31. Older IIMs, including IIM-Ahmedabad and IIM-Bangalore, don't have to depend upon the Centre for funds as they charge a very high fee for their management and education programmes. Their overall reputation as premier business institutes gives them an edge over others. New IIMs don't have the same brand value as the older IIMs.

Until recently, the HRD ministry was preparing a Cabinet note seeking additional Rs 300 crore for each of these IIMs. The government, however, seems to have junked the idea of pumping more money into these B-schools as constitutionally they need to become self-sufficient institutes.

The report also said the Centre will only release the pending funds to IIM-Ranchi (Rs 263 crore), IIM-Raipur (Rs 50 crore), IIM-Rohtak (Rs 46 crore) and IIM-Kashipur (Rs 27 crore). Two other IIMs at Udaipur and Tiruchirappalli have used Rs 344 crore and Rs 370 crore, respectively, on their campus development, the report added.

Edited by Manoj Sharma

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