Finance Minister Nirmala Sitharaman announced a 50.67% decrease in funding for Indian Institute of Managements on Wednesday, February 1, as part of the 2023-24 budget. The funding has been reduced to Rs 300 crore, down from the previous fiscal year's Revised Estimate of Rs 608.23 crore, despite an overall 8% increase in the higher education sector's budget to Rs 44,094 crores for the 2023-24 fiscal year, according to a PTI report.
As per the Budget Estimates (BE) for 2022-23, the IIMs were allocated an amount of Rs 653.92 crores. According to IIM Udaipur Director Ashok Banerjee, the government might be sending signals to IIMs to be more innovative in funding their growth plans. Sharing views, he told PTI that "The cut in budget allocation for the IIMs may hurt the newer IIMs, the latest IIM is about seven years old though."
"However, through this cut, the government perhaps is sending signals to the leadership of individual IIMs to be more innovative in funding their growth plans like promoting use of PPP model and also to the industry to support academic institutions of national importance through CSR initiatives and other donations," he added.
The significant reduction in IIMs' budget was made under the Gross Budgetary Support (GBS) head. According to a PTI report, the allocation for the GBS head was Rs 296.81 crore in the 2022-23 Revised Estimate and Rs 323.50 crore in the Budget Estimate. However, for the 2023-24 financial year, the allocation has been reduced to just Rs 15.17 crore.
Despite the cut, the director of IIM Rohtak, Dheeraj Sharma, stated that their institute will not be affected by the reduction, as they generate their revenue through training programs and tuition fees. He noted that while they are a second-generation IIM, new generation IIMs might have to rely on government grants.
Director of Goa Institute of Management (GIM), Ajit Parulekar, added that while there may not be anything specific for B-school education in India, the finance minister's announcement of a National Data Governance framework was a highlight of the budget.
In this context, sharing views on the framework, he said, "This framework will allow us to get access to a lot of non-personal, anonymous data. Research-intensive institutions will benefit greatly from this because one of the biggest hurdles one needs to overcome during the conducting of research is the lack of data."
On the other hand, he said, "The only disappointment is that even though there is an increase in the budget for education, it is marginal. It is very low for a country that aims to grow fast. We are underspending on healthcare and education by a very large margin."
The Associate Professor, Accounting and Finance from Management Development Institute (MDI), Gurugram Ashutosh Dash said, "Though the provisions made in the budget will improve the education infrastructure in the country as a whole, the reduction of gross budgetary support from 323.5 crores in 2022-23 to 15.17 crores in 2023-24 might have a huge impact on the growth and development of newly established IIMs."
"To implement the NEP 2020 in the true spirit, the best institutions and universities of the country have been given an additional Rs 4,235.74 crore but how much can the share of IIMs be is unknown yet," he added, as stated in a report by PTI.
