The Hindu : National : `Balance sheets do not reflect true status of IIMs'

Online edition of India's National Newspaper
Monday, Apr 26, 2004

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National

`Balance sheets do not reflect true status of IIMs'

By J. Venkatesan

NEW DELHI, APRIL 25. The controversy relating to the reduction of fees in the Indian Institutes of Management (IIMs) has taken a new turn, with the Ahmedabad, Kolkata and Bangalore IIMs being accused of not giving the correct status of assets and liabilities in their balance sheets.

Highly placed sources in the Government told The Hindu that the three IIMs had not been following the mandatory accounting standards issued by the Institute of Chartered Accountants of India, resulting in under-statement of income and over-statement of expenditure.

The IIMs are up in arms against the February 5 order of the Government reducing the annual fees in the six IIMs from Rs. 1.50 lakhs to Rs. 30,000. The Supreme Court had adjourned the hearing of a public interest litigation petition to July to enable the Government to hammer out a solution.

Sources said the copies of balance sheets of the three IIMs under reference, given to the Government by the petitioners, were scrutinised by an independent chartered accounting firm of repute. The firm had come to the conclusion that the financial results, as contained in the balance sheets, did not reflect the true financial status of the three IIMs. The sources said the firm had pointed out several other irregularities and these would be brought to the notice of the court.

According to the analysis done by the firm (copies of which were made available to The Hindu ), the IIM Ahmedabad had a surplus (generated from 1998-99 to 2002-03) of Rs. 78.87 crores; Bangalore Rs. 56.11 crores; and Kolkata Rs. 105.22 crores. Income generated from fees alone for this period was Rs. 30.07 crores in IIM-A, Rs. 28.04 crores in IIM-B and Rs. 16.73 crores in IIM-C.

Cost per student per year according to the audited balance sheets for 2001-02 of the three IIMs and grant per student given by the Government are: IIM-A 2.37 lakhs and Rs. 3.51 lakhs; IIM-B 2.35 lakhs and 3.15 lakhs; and IIM-C 2.43 lakhs and 2.80 lakhs. The sources said the IIMs were set up by the Government and were governed by the Indian Societies Act. The Government paid salaries to the staff and the annual fee was subsidised to the extent of 80 per cent and an annual grant of Rs 12 crore was given to each of them. The object of reducing the fees in IIMs was to bring the fees on a par with the fees charged by the Indian Institutes of Technology (IITs), which were of equal eminence.

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