Reality Check India

IIMs outrageous moves

Posted in Uncategorized by realitycheck on March 30, 2008

Sorry about the attention grabbing title. Nothing, except being normal is outrageous in India.

Back when Murli Manohar Joshi was the HRD Minister and I did not have a blog, I used to comment under the name of realitycheck on Indian Express forums. This lasted a while until they blocked me. I remember kicking up a storm when I said the IIMs really do not get the reason they even exist. At that time, the overarching ambition for the powers-that-be was to open campuses abroad in places such as Singapore, Dubai, San Jose, etc. Some events recently have confirmed that they still do not get it. Clue : Government aided institute in a developing country.

A couple of days IIM-Ahmedabad (IIM-A) hiked their fees, scratch that. They doubled their fees. IIM-Bangalore (IIM-B) wasted no time in following suit.

Why is this a problem ? What is wrong in charging students what it actually costs to educate them ? The devil is in the details of how they plan to deal with those who cannot afford.

First the news clippings:

AHMEDABAD: The Indian Institute of Management, Ahmedabad, on Saturday announced a quantum jump in its fees structure raising it from the present Rs. 2.5 lakh per annum to Rs. 5.5 lakh per annum for the first year and Rs. 6 lakh for the second year of the two-year post-graduate programme in management.

The decision was taken at the annual meeting of the Board of governors of the IIM-A held here on Saturday just before its 43rd annual convocation later in the evening addressed by the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia.

Despite reports that both the Central and the State government nominees on the IIM-A Board were opposed to such astronomical rise in fees at one go, a spokesman of the IIM-A claimed that the fee hike decision was “unanimous.” The spokesman claimed that the government nominees were present at the Board meeting and agreed to the proposal.

Source : Hindu

Then a magnanimous gesture :

The institution, however, reiterated its commitment to support eligible students from the economically weaker sections. No student, if found eligible for admission to the IIM-A, would be deprived of the opportunity purely for financial reasons, he said.

In view of the fee hike, the Board also decided to increase the family income limit for eligibility for financial support from Rs. 2 lakh per annum to Rs. 6 lakh. “Graded need-based financial aid will be available to eligible students who qualify for financial support,” Mr. Singhania said.

Source : Hindu (emp added)

I could go on about how the IIMs primary goal must be to make quality management education accessible to Indians. Even though they do not get it, lets no belabor the point.

The issue I have is the effect of this hike on the “approachability factor”. Words like “eligible”, “need-based”, “family limit”, “deserving student” – are evil, no matter how well intentioned they are. They act as barriers and only encourage groups which are confident of negotiating them.
Back to the fee issue. The whole “no deserving student left behind for economic reasons” argument holds no water. Here is why !

  • The 6 Lacs per annum limit is arbitrary and without justification.
  • There is a risk of making the whole program unapproachable due to perception of cost and nervousness with the proposed aid system. “What if they reject my financial application on some flimsy grounds ? What if the loan officer does not like my looks, caste, religion, whatever ? My dad earns 7 lakhs, but is in deep debt, can I pull off the aid ? Is this “IIM” thing for rich kids, like Manipal, I do not know if I should try out ? What if by chance my aid gets rejected, I dont have a backup plan ?

The right approach : An automatic aid system

A guaranteed financial aid system. This must be automatic for those who apply.

This must feature :

  • no collateral
  • no eligibility cut offs such as the Rs 6 Lakh figure cited by the board
  • no personal interviews
  • no demands on parents or guardians
  • the interest rates must be nominal and must be on easy terms, there must be an option to start payments after a year or two of employment
  • this must be clearly advertised in the announcement notices for the CAT exam

In short, the lower or middle income group Indian must feel, “IIMs are expensive and my family is not in great shape. This is not a factor because they have this automatic aid package. I know I am guaranteed aid and I can pay back once I get a job on soft terms. No ifs and buts.”

An alternative is to keep IIM fees the same or to LOWER them. The selection process is still strong, so the brightest will make it anyway. Maybe, they have to slum it out and not be as flashy as the ISB or Great Lakes. They should let private schools go after the higher end and begin measuring their own operations to their original charter. They should go “wide” more then “deep”. If this means conceding top place to ISB, then so be it. IIMs cant fight the ISBs in the long run, as long as they accept taxpayer money.

Standardization – the hidden dangers

Posted in Uncategorized by realitycheck on March 19, 2008

I had the good fortune of closely interacting with many Srilankan Tamils in the US and Canada. I could not help notice that almost uniformly they possessed an excellent command of English, unlike those in Tamilnadu.  Eventually, I discovered that the refugee Tamil population in Canada is actually highly educated. Whenever they talked about the discrimination they faced back in Srilanka, they were referring to the standardization system which squeezed them out rather abruptly in 1971. This post is about the mysterious “standardization” system.

‘The qualifying mark for admission to the medical faculties was 250 (out of 400) for Tamil students, whereas it was only 229 for the Sinhalese. Worse still, this same pattern of a lower qualifying mark applied even when Sinhalese and Tamil students sat for the examination in English. In short, students sitting for examinations in the same language, but belonging to two ethnic groups, had different qualifying marks.’

A.M.De Silva (source)

The roots of the current conflict might actually lie in this system.

‘By 1977 the issue of university admissions had become a focal point of the conflict between the government and Tamil leaders. Tamil youth, embittered by what they considered discrimination against them, formed the radical wing of the Tamil United Liberation Front. Many advocated the use of violence to establish a separate Tamil state of Eelam. It was an object lesson of how inept policy measures and insensitivity to minority interests can exacerbate ethnic tensions .’

A.Jayaratnam Wilson (source)

So, what exactly is this standardization system.

The Wikipedia entry says.

30% of university places were allocated on the basis of island-wide merit; half the places were allocated on the basis of comparative scores within districts and an additional 15% reserved for students from under privileged districts.

(Wikipedia caution ! it cites the date this policy was introduced as 1973 while most sources claim it as 1971)

In short, after Sri Lankas independence Tamils were first off the line when it came to English education and were therefore able to compete better and secure a disproportionately larger seats in Universities. I am not sure if the standardization policy was devised to “cap” the Tamils or whether this was a happy side effect. It however seems to be true that all rural people whether Tamils or Sinhalese were able to take advantage of the scheme. The worst hit were the educated Tamils , for whom doors to education were suddenly shut.

This blog has always maintained that such schemes are extremely dangerous if not minutely monitored.  The immaturity of the Sri Lankan government in not being able to secure the rights of Sinhalese without “capping” the Tamils is what has brought the island state to where it is today.

The Sri Lankan ambassador to the United States , Mr Bernard Gunatilake recently published an article in the Washington Times that has caused some furore.  His article grossly underestimates the damage caused by such capping policies.  It is clear that even after these years the Sri Lankan government stubbornly refuses to see merit (!) in the Tamils feelings of discrimination.

He says:

Furthermore, even though the LTTE is attempting to establish a mono-ethnic separate state for about 12 percent of “Sri Lankan Tamils” in the north and east, (”Indian Tamils” comprising 4.6 percent of the population are part of our democratic fabric), more than half of that population now lives in safety and peace among the Sinhalese and other communities in the south.

Source : Article

An excellent response by  Prof Ratnajeevan Hoole

First, he says weighting examinations was never intended to discriminate against us Tamils. I took the common Advanced Level exam in 1969 and was admitted to the engineering faculty.

The government then redid the admissions after adding some 28 marks to the four-subject aggregate of Sinhalese students.

I lost my seat. They effectively claimed that the son of a Sinhalese minister in an elite Colombo school was disadvantaged vis-a-vis a Tamil tea-plucker’s son. Unable to defend this, in 1973 they created the statistical scheme equating Tamil and Sinhalese averages with regional preferences to which the ambassador refers.

Source : Article

I am not interested in taking sides, but the case of Sri Lankan Tamils have a striking resemblance to the fate of the so called upper castes in India (esp Tamilnadu). I bet behind the scenes the Sri Lankan interlocutors waste no time in bringing out a mirror when lectured by Indians. 

(Note for foreign readers : Upper castes should not be taken to imply the current presence in these groups of dominance in education, politics, social, or economic life. It is just a category.  )

What lessons can be learnt from this system for India ? 

For those who do not know India (esp Tamilnadu) has a far more draconian quota policy. In Sri Lanka, at least the Tamils who are in rural areas can hope to get the benefits.  In India, the scheme works on the basis of birth only. The son of a doctor will trump the son of a cook with higher credits based solely on whether or not his caste is preferred.  The benefits are also permanent (TN has has this system for 85+ years and KA for 90 years)  and not subject to monitoring. In other words, they are unconditional. We have no data to show how castes (the staging unit for the policy) have benefited from the system which has been in force for 85+ years.  The Indian judicial system has also been shy about putting its foot down about data (until now) like the Sri Lankan judiciary.

A question :

If the quota system in Sri Lanka caused the affected Tamils to rise up in strong protests ending in violence, why have’nt the affected castes in India resorted to mass protests leading to a comparable violence ?

The answer lies in the size of India. I suspect when the Brahmans were suddenly checked in Tamilnadu in the 1930’s, many of them who were rendered “overflow” (could not fit into TN education or state employment) simply went to places like Bombay, Bangalore, and even northern India.  Presumably, these states did not have a similar “check” on them and they picked up their lives there. I think the same holds true for some Kannadigas and Keralites too.  For Kerala, add caste, religion, and the communist strangehold to the mix. The private sector also offered enough outlets.  Leaving is an easier alternative to blowing yourself up.  The safety valves worked until now.

The current UPA government’s policies, most notably its adamant refusal to monitor the social programs, are designed to further reduce these safety valves and bring more and more areas of life into this fold.  They do not realize that immigration opportunities to the west are limited and that the really backward are also affected by their policies.  The “life stories over data” approach to social problems will lead to further disenchantment among those who really deserve help and will lead them first to extremism.

Tragically, the SL Tamils did not have the luxury of escaping such capping of their life opportunities. These checks placed by the standardization policy were permanent and left them with nowhere to hide. The lack of a safety valve led to deep resentment and subsequently entered a series of events which lead to a downward spiral.

Many claim that the standardization policy also impacted the urban Sinhalese. That may well be true, but its effect on the Tamils has been devastating. The SL government’s inability and immaturity to provide a soft landing to those affected by this policy is an entirely different story.

Update : Fixed typos.

Painting exhibition shut down

Posted in Uncategorized by realitycheck on March 8, 2008

Its that time of the year again. Wine sipping, art-for-arts sake loving journalist types,  have to just lie low and stay quiet for a while.  It seems we cant paint mughal emperors in India – unless the painting glorifies them. No goons wont attack you, the government will shut down the entire exhibition.

The Chennai police forcibly shut down an art exhibition at the Lalit Kala Academy on Mughal emperor Aurangzeb. This was curated by journalist Francois Gautier.

The secretary of the academy Mr RM Palaniappan has this to say,

Following Muslim protests, the exhibition of paintings and reproductions of Arabic and Persian documents alluding to destruction of Hindu shrines at the LKA here since Monday was closed down to ‘prevent a law and order situation’.

‘We had no other option but to close it down. Some Muslims objected to it citing wrong inferences drawn from Arabic texts which could not be independently deciphered by anyone here,’ Rm Palaniappan, the secretary of the Chennai LKA told IANS.

‘We requested the removal of some objectionable materials – including a few illustrations of temples being pulled down during the era of Mughal emperor Aurangazeb – thrice as their display is against our rules.

Source : News Post India

The material behind these paintings and other original edicts are kept at the Bikaner museum. Should we also ask them to remove it ? Maybe burn the museum down ?

The same paintings, this is a travelling exhibition, were presented at New Delhi, Pune, and Bangalore.  There was nothing found amiss or objectionable then.

The police took into custody three lady volunteers at night and detained them for an hour.

LKA regional secretary R M Palaniappan told the media he “should have screened the exhibits more carefully”. Joint Commissioner of Police P Balasubramanian later told the media: “We feared it might create a law and order problem.” The three women from FACT, Saraswathi (65), Vijayalakshmi (62) and Malathi (47), were picked up from the show at about 7.30 p.m. and taken to the police station, where they were allegedly held for nearly an hour without being allowed to contact their families or any lawyer.

Source (emphasis mine) : ET

This brings us to the most important issue. Indeed, this is a shining example of the perversion of democracy in India. The job of the police is not to prevent law and order problems – their job is to handle law and order problems. It is easy to prevent law and order problems  by just conceding the demands of every group that announces their intent to create one.  Some political groups have announced they fear “major law and order problem if data on social programs are requested”.

This is what The Hindu has to say about it ( Prince of Arcot welcomes decision). Their editorial celebrates the communists four in a row win in Tripura. As independent humans, it is we who must decide what to do with our money. You are free to continue buying this paper or to click on ads on their website.  This purely depends on whether that paper aligns with your own self interest. Deccan Chronicle once again has better local coverage on the incident.

More links :

Philistines brush aside paint of history

FACT website

PS :

What were the exhibitors thinking with a name like FACT (Forum Against Continued Terrorism) ? Anything named “FACT” is not welcome in India. The only worse name they could have come up with is “DATA”.

More on the budget

Posted in Uncategorized by realitycheck on March 4, 2008

My earlier posts on the budget were rather lightweight. That is largely because I do not possess adequate knowledge of big picture economics (macro?).  Even though “inadequate knowledge” never stopped me before, macro-economics is harder to pull off.  When I read such articles, I can however go “that sounds about right”, or “hey that doesnt hold together”. 

I was hoping to read about the possible ways to finance the Rs 60K Crore loan waiver and what each of them would mean. Even the Indian Economy blog has not covered it yet, although they do have an important post by Nitin wondering about the nature of these loans. The mainstream media has all but forgotten about the waiver.

Barbarindian has an excellent post which lays out the possible ways to finance the waiver. It also raises several points for the first time such as the impact of this waiver on farm insurance schemes.  All this wrapped in his usual take no prisoners style.

If this is the case, the FM perhaps wants to induce inflation, bring the Rupee up to 45 to the dollar, aggressively import food grains and hope for a rebound. Alternately the FM is betting on the fact that inflation is a lagging indicator. By the time the waiver is worked in and all the factors set in, it will be late in the year.

In the latter case we will likely see the general elections happen later this year.

Check out the full article now.

The farm loan waiver loot

Posted in Uncategorized by realitycheck on March 2, 2008


The so called economic intellectuals are really cutting a sorry face on TV. They look at each other mid sentence as if asking, “How am I doing so far ?”.

Is everyone in India just comfortable ignoring the herd of elephants in the room ?

Apparently not everyone. This blog has  always held that M.J. Akbar is one of the very few true intellectuals in India. I dont mean being intelligent or scholarly, but simply who speaks his mind independently. Another is Chandan Mitra (see below)

In this own style, he hauls up the recent waiver of Rs 60,000 cr ( $15B) farmer loans (not necessarily farm loans).

The Congress formula for a victory in a general election is rather clever. The first ploy is to create the conditions for a plague and take credit for a miracle cure. The second line of private thought is even more cynical. If this ruse works, then the Congress can laugh all the way to the vote bank in October and tax us all next February till our pips squeak. And if the ruse does not work, it will be some other government’s headache. In the 19th century, American hustlers used to peddle “snake oil” at fairs to gullible fellow countrymen. This Sonia Gandhi-Manmohan Singh-Chidambaram loan waiver is the biggest snake-oil sale in the history of finance.

and further,

This one is a circus of magnificent proportions. It is not the audacity of hope, but the audacity of recklessness. Only when you are certain that you have nothing to lose do you gamble everything on an IOU. Duryodhana tried it in the Mahabharata. The results were not particularly happy.

Source : Arabnews

Chandan Mitra adds,

While Governments do have a responsibility towards the well-being of all, particularly less privileged, sections of society, it is wrong in principle to treat wilful defaulters the same way as those in genuine distress.
The second objection is even more serious. By this act, the Finance Minister has set a bar that all subsequent Governments will be compelled to observe. Hereafter, it will be impossible for banks to recover loans given to farmers because the recipients will have good reason to believe that eventually the loan will be waived and so why bother to pay even one installment?

Source : The Daily Pioneer

The real questions are :

1 What about the borrowers who paid back ?

2 What about the farmers who own more than the rather arbitrary 5 acres ? Do the rain gods selectively rain on their lands ? A drought is for everyone.

3 If, in an given area more than few are paying back – then what is the rationale for a waiver. This is just plainly encouraging delinquency.

4 What percentage of farmers in Telengana and Vidharbha have access to structured finance ? Statistics please, no tear jerkers.

5 This will never be a one time exercise. If it is, then every political party would want the same one time exercise. Why only the Congress ?

To wrap up, Mr Chidambaram’s press conference was a true classic. When pushed by a reporter how he planned to finance this. His curt and rather rude answer was, “You have to leave it to my intelligence”.

Ah, we get it. Life stories over data – every single time.