AICTE fiat sets the clock back on B-schools

Business Today | Premchand Palety

The All India Council for Technical Education, or AICTE, issued a notification on December 27, 2010 that surely spoilt the New Year party of many B-school directors. The notice, which threatens to drastically curtail the autonomy of B-schools and open the floodgates of corruption, will only stymie the growth of quality institutions in the private sector.

Implementation of the notification will see state governments deciding and controlling the fee structure and admission procedure in AICTE-approved B-schools. Further, the major part of the curriculum will be designed by the council and admissions will be restricted to April and May only.

While the last two decades have seen a proliferation of private B-schools, it is true that many of them offer sub-standard education. Of the 2,000-odd B-schools in the country, just about 50 have systems and processes in place to deliver quality education. However, if the main objective of the new control regime is to ensure quality for the rest, the authorities have got it completely wrong.

Historically, AICTE controls have only facilitated the mushrooming of dubious management institutes, strangulating the growth of good ones in the process. For example, its diktat to restrict student intake for the first year to 60 and incremental increase in subsequent years created difficulties for genuine players as they found it difficult to break even without at least 500 students on the campus. The demand created by a liberalised economy was filled by dubious institutes, which either blatantly violated the law or survived by bribing the regulator. Such schools often siphoned off the surplus generated from student fees, did not invest in faculty and lured students with misleading advertisements.

The right approach to ensure quality is to facilitate growth of good institutes so that they can crowd out the dubious ones, a process that has already begun. Last year, around 60,000 or about 30 per cent of the AICTE-approved management seats went vacant. One important reason behind this was that reputed B-schools were allowed to significantly increase their capacity in the past few years.

The new set of rules will only move the wheel backwards, creating hurdles for serious players such as a shortage of funds to invest in faculty, inability to get the right students and implement innovations in curriculum, pedagogy, etc. Meanwhile, the shoddy ones will continue to buy their existence. One cannot expect B-schools to achieve world-class standards by charging a low fee.

The existing fee committees of various states are already entangled in legal battles and corruption charges. Restricting admissions to only April and May, when most universities conduct their exams, will create problems for prospective students and institutes alike. I have been actively involved in the performance appraisal exercise of Indian B-schools for more than a decade. In the process, I have visited all the top-ranked private B-schools. The directors of these institutes attribute their success to the autonomy given to them in curriculum design, student selection and revenue generation. Worldwide, autonomy is the hallmark of reputed institutes.Autonomy breeds innovation.

In the Indian context, the regulator's job should be to see that students do not become victims of misleading claims by an institute. It is already mandatory for B-schools to display the accurate data pertaining to faculty, placements, infrastructure, etc., on their website. AICTE should have a mechanism to regularly check such data and advertisements, redress student grievances and punish the guilty.

Controls beyond this will be retrograde and only breed corruption.

The author is the Chief Executive of C fore