End this Killer Raj, February 10, 2008

For the first time an Indian institution of higher education has been ranked among the top twenty in the world. The Indian School of Business (ISB) was ranked 20th in a list of the top100 business schools by the prestigious Financial Times two weeks ago. A Chinese business school was No 11; four European schools came in the top 10, and the rest were from the United States.

But wait a minute. Isn’t the ISB illegal? ISB officials explain that they don’t want accreditation from India Council of Technical Education (AICTE) because then “they will decide our courses, our student intake, and even the size of our buildings”. I spoke to a top AICTE official, who scornfully dismissed the Indian School of Business--“its fees are too high and it doesn’t even have a permanent faculty”. I gently suggested that its faculty is world-class if not permanent. And why worry about fees when every student has a loan. They must be doing something right if students command a mean salary of Rs 16 lakhs a year at graduation.

ISB is India’s only school in the top-100 list. There might have been more but for AICTE. One of these is Mumbai’s premier SP Jain Institute, run by a no-nonsense Harvard graduate. It doesn’t bribe; nor does it succumb to politicians for admissions. Hence, it is punished. It applied to admit 120 students in 1992, but got approval for 45. In 2001, it applied for 180 but didn’t get approval for six years. In 2004, AICTE rejected its unique dual degree program with a reputed foreign university, whereby the latter would have flown its faculty to India. Its innovative program for family-run businesses was also rejected. Last year, it seriously contemplated closing down. Instead it has started campuses in Dubai and Singapore--far beyond AICTE’s reach.
What do you do when the keepers of the law become its oppressors? AICTE was set up to encourage higher education but it achieved the opposite. Honest officials have tried cleaning it up periodically, but they have always been removed by politicians, who happen to own many of our worst private institutions. The answer, of course, is to give autonomy to all education institutions. Regulators should only ensure that they provide mandatory disclosure on the Internet about their courses, faculty, fees, and facilities (with severe punishment for false claims). Professional rating services should evaluate colleges with the same credibility as CRISIL rates industrial companies. Competition will take care of the rest. Students will be able to make informed choices. Good institutions will thrive and poor ones will close.
In the India of my dreams the government will stop running universities and colleges. All institutions will be autonomous. The government will plough all the money saved into scholarships. The Government’s role will be limited to governance-- ensuring corruption free ratings and corruption-free exams (with the credibility of IIT-JEE) at various stages in a student’s career. The tombstone of the UGC/AICTE Raj will thus read: “For fifty years we promoted rote learning, incompetent faculty, and mediocrity. We punished original thinking and failed to create an employable graduate. We pushed students into a parallel universe of coaching classes, which ironically took their obligation to students far more seriously. We deserved to die.”

Building India is about building institutions. This Sunday let’s celebrate the emergence of a world class institution in India. The altruistic founders of ISB had a vision. They funded it privately and nurtured it in its early years. They persisted in difficult times, especially when they were under attack from AICTE. Now, his is how to build fine institutions.