Pavan Soni
Research Fellow
IIM Bangalore

There has been a recent drive to open up more IITs and IIMs in India, one in every state. The jury is still out on whether such a move would really help in offering quality education to students in a country which is replete with institutions of higher education. Moreover, will standards not get diluted in the process of reaching out to a large number of aspirants? I reckon that there are three basic flaws in the proposal of setting up more IITs and IIMs in the country.

Quantity yields quality

What is the reason for the above average performance of IITs and IIMs? Is it the funding, or teachers, or students? I reckon that it is the presence of above-average students who get admitted to these coveted academic institutions. They are above-average because they compete with a large pool of aspirants, and this very simple output-input ratio ensures that only the best survive. Think of the league matches in the ongoing FIFA World Cup 2014. The teams that survive through the league matches make for exciting contests later in the tournament.

Now think of the impact having a large number of seats in IITs and IIMs would have on quality of intake. We are rapidly increasing the feasible output, and in that process, relaxing the output-input ratio and hence relaxing the intensity of competition. If aspirants have to compete for say 3,000 seats across IIMs today, in the new system they would have to compete for 15,000. This would mean that not the best of the lot would get into an IIM. And if IIMs are all about quality of students that come through rigorous competition, what would be an IIM without competition? It would be yet another college. Worst still funded by the government by tax-payers' money. We still invest our hope in our judiciary system because of very high entry barriers for people graduating to the level of judges in our country. Remember, high entry barrier always make for good quality of products

Market incentives pip hierarchies

One big reason why higher-education in the USA is so productive, in terms of research and quality of outgoing students, is because of minimal government intervention. A majority of higher-education institutes are private in nature in the USA, and even in Europe. This brings us to the very question - why did government get into setting up IITs and IIMs in India at the first place? Government's investment into any project, whether it be railways, defense, nuclear power generation, or research and development, is driven by two key factors-strategic significance, and lack of incentives for private participation. Post independence, we needed to build our capabilities around higher-education and research in order to support our industrial growth and for import substitution, which to a great extent we did. The output of our planted investments in IITs overshot the absorptive capacity of India, and hence we pretty much exported our talent to western world all through the decades of 70s, 80s and 90s. Only in recent years we are able to be a good customer to our own products.

Take the case of Indian School of Business at Hyderabad, and BITS Pilani, and their other campuses across India, or for that matter, International Institute of Information Technology (IIITs) across India. These private institutes have demonstrated that they can compete with, and even in certain cases give a run for their money to government funded institutes. When higher education is neither an area of strategic investment nor there are missing market incentives, government shouldn't divert its precious money into managing such academic institutions. Let the market and not hierarchies rule.

Creativity happens at intersection of disciplines

One very big advantage that our university system offers is the confluence of several disciplines in one central place. Think of the most coveted technology or management institutions in the west. They are mostly a part of a university system. Because new ideas are born at the intersection of disciplines, as a university system offers a ecosystem where a student gets exposed to several complementary disciplines, and students, and hence the chances of hitting onto something novel is high, as compared to in an isolated campus.

Our IITs focus on engineering, and to a lesser extent on science, and our IIMs excel in Management education. There is barely any exposure to disciplines such as Economics, Sociology, Psychology, Medicine, Mathematics, Physics, Chemistry, and Biology and of course Arts in either of the campuses. IITs to some extent have first-year courses on basic scientific discipline, but these are mostly superficial. Think of the wonder it could do if students were exposed to a host of disciplines during their study years, and can take up cross-cutting research work. Planting more of IITs and IIMs, mostly in remote parts of the country, won't help any of the cross-cutting research that I am alluding to. In fact this would only drain government's money into creating islands of excellence, if any.

So my submission is that if the call of the hour is to produce higher quality of our workforce, both in terms of skills and knowledge, draining government's funds into areas which are best managed by private players should be avoided at all cost. Look at Mumbai and National Capital Region (NCR), where there are no IIMs. This has helped a host of private and government management institutes to flourish. While Mumbai has private campuses like NMIMS, JBIMS, and SP Jain, alongside NITIE and IITB-SOM, the NCR has MDI, IMT, IIFT, and FMS-DU, among others. None of such private players or even government act is to be seen in Bangalore or even Kolkata where IIMs exist! So in turn planting an IIM in a city might pose disincentives for private players and even for existing government academic institutes to offer good quality management courses. They will get marginalized with time.