IITB’s Money: P = NP?

Ever had any questions about IIT Bombay finances? Manas and Sudarshan shed light on the institute expenditure

In light of numerous discussions on resource crunches and wastages, we felt the need to delve into the fundamentals of these issues to examine their significance. To this end, we found out a few numbers.

Non Planned Expenditure

Expenditure by IITB can be broadly categorized into Non Planned (NP) and Planned (P). The Non Planned expenditure is the recurring amount incurred each financial year. This includes salary, pension benefits, medical coverage, maintenance, operational, administrative and departmental expenses, electricity and water and hostel subsidy. For this part of the expenditure, the HRD ministry allots each IIT a block grant. This is calculated by factoring in the number of students in each programme based on the Government’s perception of the average expenditure per student. In 2002, the total grant to IITB was pegged at Rs. 72 crores. It hasn’t been changed since. Consequently, cost inflation and new pay scales for employees haven’t been taken into account. This amount is insufficient, considering that the NP expenses for the year 2007-08 were Rs. 132 crores, a shortfall of Rs. 60 crores.

How do we cover the shortfall?

Some money comes from other sources of income which include Consultancy, Overheads of sponsored projects, All India Exams (JEE, JAM, GATE), Tuition fees and Continuing Education Programs. This contributes to just less than Rs. 39 crores. Even after all this, each year, the Institute falls 5 – 10% short of the requirement. Last year, after continuous coaxing, the Government agreed to provide an extra Rs. 12 crore. This still left the Institute Rs. 9 crore short of the budget.

In the past, the institute had saved money from grants, the interest on which was used to pay the deficit. But, the situation has degenerated to the extent that the principal is now being used to bridge the gap. Consequently, the interest accrued next year will decrease as well. “This situation may not perpetuate, given that the Government is reviewing the block grant later this year”, says Prof. Shevgaonkar (Dean RM).

Planned expenditure

This money is used for asset generation, that is, procurement of major equipment, construction of new buildings and library expansion. However, there is a time lag between the money being promised and the money actually being received. In the interim, the Institute uses its own money to fund such projects.

It is worthy of note that the alumni contribution towards a donated building is 50% of the total cost. The money allocated for new projects reflects the Institute’s contribution towards both donated and self funded buildings. It is paradoxical to note that while new buildings are coming up, the block grant is not adjusted for the additional maintenance cost. The planned expenditure for the institute in 2007-08 was Rs. 65 crore, of which Rs. 58 crore was for new projects.

In the light of the above, it seems obvious that, at one end, the Institute is funded sufficiently for Planned expenditures while it falls into deficit dealing with recurring expenses. Thus, it is very important that the Government takes this into account at the review later this year. Otherwise, not only will we will be back to square one in the near future, but things will only get worse.

(Sudarshan Bathija and Manas Rachh are third year students of the Physics and Aerospace Departments respectively. They can be contacted at sudarshanb@iitb.ac.in and manasrachh@iitb.ac.in)