Citing the need to be self-sufficient, the HRD ministry has decided to stop additional funding of the six newly-established Indian Institutes of Management (IIMs) which have recently got autonomy tag.
According to a report by Economic Times, the HRD minister has decided to do so to IIM Rohtak, Tiruchirappali, Raipur, Kashipur, Udaipur and Ranchi which were set up during the UPA regime in 2008-2009.
Most of the above insitutes, except IIM Ranchi, require additional capital as they are in the last leg of constuction of permanent campuses.
The Centre had allloted Rs 333 crore to these institutes in 2009 for construciton of campuses. However, the actual construction work started in 2014.
Unlike the older IIMs, which generate revenue from the fees charged for management and executive programmes, the new institutes cannot do so as they are yet to command brand value.
The HRD department had been preparing a cabinet note seeking funding of almost Rs 300 crores to each IIMs to help them dide over cost overruns, but then took a U turn.
The IIMs have overrun their costs because of change in infrastrucrure plans and will now have to cope with the extra cost themselves. They can increase the fees for course, consultancy projects or borrows, said people associated with the matter.
According to ET, as a last leg of help, the government will only release amounts which are pending to the other IIMs: Rs 263 crore to IIM Ranchi, Rs 50 crore to IIM Raipur, Rs 46 crore to IIM Rohtak and Rs 27 crore to IIM Kashipur.