Celebrating Anonymous Donation to IIT Bombay

Blog Index

IIT Bombay received INR 160 corers from an anonymous donor. It is heartening to see that successful alums from an Indian institution give back generously to their alma mater. The donation to IIT Bombay is not new, it has received large donations from Kanwal Rekhi, Nandan Nilekani, and others in recent past. Other old IITs and a few renowned educational institutes have also received generous donations from their respective alums. Well-known universities worldwide, like Harvard, Cambridge, Oxford, CMU, Yale, etc., regularly receive large donations. However, this anonymous donation to IIT Bombay is a momentous event for an Indian institution. I wish it becomes a trendsetter for donations to educational institutes in the country.

Before celebrating the event, let us understand why donations are vital to educational institutions’ survival, autonomy, and excellence. Let us restrict the discussion only to the Indian context. The problem is more or less similar elsewhere. The total outlay for the education sector in the central budget is 1.12 lakh corers. It includes 65k corners for School Education and literacy programs and 44k corers for higher education. India has an enrollment over four crores in higher education (PIB sources) in 2020-21. The cost per student in professional education is 70k per year. In non-professional courses, the cost per student year will be between 30-40k per student. Therefore, there is a massive gap between requirements and resources. Govt spending on freebies is now between 1.7-2.7% of state GSDP. However, for the states like Andhra Pradesh, MP, Punjab, West Bengal, the figures are 14.1%, 10.8%, 17.8%, and 9.7% of their revenue receipts respectively. The state spending on education and healthcare suffers from freebies or doles. AIDMK party in Tamilnadu was the first to start a freebie culture for electoral gains. Other parties were quick to follow the electoral success shown by AIDMK. The debate between subsidies and allocation for the social sector is a complex issue. Freebies like food rations and mid-day meals provide a safety net for the survival of a large section of society. However, it also breeds a sense of complacency among the populace. It has led to a situation where GSDP is suffering, as there is no sense of urgency for people to work for a living. Karnatak’s congress party announced freebies to the tune of 62k corers before the election in the state without working out the budget details. If the promised freebies were to be now implemented fully, it will plunge the state of Karnataka into bankruptcy. Punjab is already in serious trouble. The story is similar for other states, too.

Education is a subject in the concurrent list. Most universities and educational institutions nationwide are administered and controlled by the states. The states bear about 80% of spending in the education sector. Therefore, freebies and expenditures in the education sector are closely linked to managing a state’s fiscal deficit. The states cut back grants to educational institutes to tide over the fiscal deficits. As a result, the universities can do very little beyond struggling to maintain teaching activities. Most state universities and professional colleges operate with 30% of regular faculty strength. By and large, teaching activities are carried out using guest and ad hoc lecturers who generally are paid a fee of Rs 500-1000/- per lecture. Underpaid teachers are understandably underqualified. They neither have the knowledge nor the ability to teach. There is no funding for research or even for running science labs. Universities need to receive significant donations to survive in this situation. I was reminded of the situation in Sri Lanka. Sometime back, I received a request for evaluation of a Ph. D. thesis from a Srilankan University. After I had submitted the report, the university asked me to fill out a form to claim the examination fee. I came to know that the student had paid for the thesis submission, examination fee, and the mailing charges. However, according to university rules, I still need to send the form and write a waiver letter for examination fee. The Srilankan situation may have a different explanation. However, the root cause boils down to the scarcity of resources. Bad politics have already destroyed the higher education system to a point where it can never turn around without a well thought-out idea.

Now, let us examine the situation in centrally funded institutions. At least the teaching activities in these institutions are managed by regular faculty. Research grants are administered through various agencies like DST, CSIR, ISRO, ARB, and MeITy. The govt bureaucrats control these agencies. Though the DST chief is a technocrat or scientist, there is no structural support system like NSF where scientists control, evaluate, and disburse the grants. I handled both CSIR and DST grants. The bookkeeping level is not worth the time to go for those grants. I mainly worked on multi-nation collaborative grants where bookkeeping is relatively easy. The institute’s finance and accounting department also enforces its level of bureaucratic interference, especially on grants from govt agencies.

Let us delve a bit deeper into research and innovation grants. The government of India declared several institutes of eminences (IoE). The budget allocation for IoE has increased by 25 percent from last year’s revised estimates. The stated aim of establishing IoEs is to encourage faculty members of those institutes to compete with the highest levels of global excellence in teaching and research. It is, however, interesting to note that funding for most research programs has stayed the same or decreased. I fail to appreciate the level of thinking that goes into the strategy to boost research and innovation. We cannot maintain islands of excellence when the surrounding is full of muck and dirt. IoEs need a set of lower-level feeder institutes for human resources. So, there should be a proportionate increase in research innovation budgets for secondary-level institutions. Even then, the central govt’s efforts will only work with support from state governments. Unfortunately, state governments have a different level of thinking. Education certainly not the highest in their priorities for staying in power.

Let us examine the effectiveness of CSR funding. The government of India enacted the CSR Act in 2013. It became applicable only on 1 April 2014. Tata and Birla Group of companies were funding education institutions much before independence. Birla Group established engineering colleges; among these, BITS Pilani is perhaps the best private engineering college to be in the top 1000 world rankings. IISc is globally well-known institute among the several funded and established by the Tata Group.

The companies with

are required to constitute a Corporate Responsibility Committee of the Board. I guess the number of such companies will be close to 6000. The CSR contribution is pegged at 2% of the profit. CSR is still evolving. The government is persuading companies to support strategic initiatives for the national building, including a cleaner and more sustainable environment through CSR avenues. Therefore, CSR funding is not restricted to funding initiatives for education sectors. Educational institutions receive only a small amount of donations from CSR funds. Many companies have established their educational institutions to plough back CSR funding through the trusts held by their founders. The total CSR funding to the educational sector is nearly 3k out of 26k corers in 2020-21. So, CSR contribution to the higher education sector is under 2% of govt spending.

Alternative funding sources are essential given the scenario of govt grants, and the fact that CSR funding has contributed little in terms of reality. The anonymous donation that IIT Bombay received, therefore, is an event to celebrate. The CSR Act needs further updates to encourage companies to donate to institutes outside their control. Let us hope that successful alumni from different institutes give such generous donations. Once an institute becomes financially independent, there are fewer chances of govt interference. Furthermore, pressure groups and well-meaning educationists should lobby for an independent higher education regulatory board having a constitutionally sanctioned power. Then, it would be possible to stop the political interference in the affairs of a university. It will bring not only fiscal stability but eliminate unwanted political intereferences from education sector.

Back Index