Funds crunch: IIMs work on tough options

While the ministry has allocated funds to these institutes for implementation of the OBC quota, the IIMs allege they are inadequate. IIM directors on conditions of anonymity say the ministry has sent in even the promised amount and has just given Rs 2-3 crore so far in most cases and that can hardly take care of any infrastructure activity.

So, even as the ministry says there has been zero utilisation of allocated funds, the IIMs argue that the ministry8217;s method of sending the amount in small installments can hardly help start expansion works. 8220;The ministry8217;s methodology is problematic. They say we should spend on our own and send them bills and they will reimburse the amount. However, when works involve costs upwards of Rs 30 crore, how do we mobilise that much money. The ministry had assured us that it would help fund the entire expansion exercise for OBC quota implementation, yet it is allocating us half or so of the estimated costs. This has forced us to look at not so conventional ways of raising funds. Some IIMs were even considering options like external borrowings,8221; says director of one of the IIMs.

IIM Bangalore has 8216;for now8217; reduced its estimates of the required amount for upgradation this year to Rs 50 crore from an initial figure of Rs 114 crore. The institute will add another 150 seats in the next academic session and needs enhanced facilities for classrooms, housing and faculty. The ministry has agreed to allocate only Rs 29 crore.

8220;That means the IIM has to raise the balance amount on its own. While we did write several times to the ministry asking them to make the estimates more realistic, they did not take note. Now we will raise funds from our own cash flows, slow down our expansion plan and opt for off-campus housing,8221; says Pankaj Chandra, director of IIM Bangalore.

IIM Ahmedabad has a similar tale to tell. Against a projected requirement of Rs 54 crore at today8217;s prices, the ministry will give the institute Rs 34 crore. 8220;We will have to dip into our own corpus to meet the expenditure. So far, the ministry has only sent us Rs 2 crore and we have been writing to them to send us the funds at the earliest,8221; says Samit Barua, IIM Ahmedabad director.

An official from IIM Calcutta said, 8220;We have to expand from existing 300 students to 462 over three years. While the HRD Ministry will be giving us Rs 50 crore, we require more than Rs 90 crore for the entire upgradation exercise. So we will be taking out more than Rs 50 crore from our own corpus and this was mutually agreed upon with the ministry. However, it8217;s a big hit to the corpus fund and defeats the purpose of creating one.8221;

The IIM at Kozhikode is facing problems of a different kind. While it needs more classrooms and hostels, it has a major water shortage and needs to set up a rain water harvesting and water treatment plant. In Kerala where land is dearer than most places in the country, buying land for this is turning out be quite a challenge. The ministry will be allocating them some Rs 22 crore. A substantial amount will have to be raised by the institute itself.

8220;We will give them the money assured but let them first spend what is given to them. There is a Government procedure to be followed,8221; said a senior official from the HRD Ministry.