Five new IIMs announced in Budget 2014; A positive move: MBA Analysis


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July 10, 2014
Finance Minister Arun Jaitely announced setting up 5 New IIMs and IITs in India in its maiden presentation of Union Budget 2014-15.
The country needs a large number of Centres of higher learning which are world class. Five IIMs would be set up in the States of Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra.

In his maiden presentation of Union Budget 2014-15, Finance Minister Arun Jaitely announced setting up 5 new IIMs and 5 new IITs in India.

Mr. Arun Jaitely said, “The country needs a large number of Centres of higher learning which are world class... Five IIMs would be set up in the States of Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra.”

Is this a good move, or an act of haste?

Currently there are 13 IIMs in India - in Ahmedabad, Kolkata, Bangalore, Lucknow, Indore, Kozhikode, Shillong, Rohtak, Raipur, Ranchi, Tiruchirappalli, Kashipur and Udaipur. In the present 13 IIM’s there 3335 seats.

In total, according to AICTE, the total numbers of MBA/PGDM B-schools in India are 3900, which together offer 3, 85,008 seats.

Considering this, IIMs have only around 1% share of total management seats in India. In this light, this is a good move by government to expand the total number of quality MBA education seats in India.

Growth of intake in AICTE approved Institutions in last six years

As per AICTE, in last six years the number of seats under MBA/PGDM B-schools in India has doubled. In year 2008-9, the total seats for management education was 1, 21,867 which increased to 3, 52,571 seats in the year 2011-12. While year 2012-13 saw a further increase in management seats than last year and the total intake rises to 3, 85, 008 seats under MBA/PGDM B-schools in India.


Management Seats
















New IIMs to boost total intake by 18%

Considering 5 more state has an IIM, it will be total of 18 IIMs. The total seats for combined 16 IIMs will reach to 3935 seats thus an increase of 18% (considering a batch size of 120 for the 5 announced new IIMs). Out of the total seats, 27% will be reserved for OBC’s, 15% will reserved for SC’s and 7.5% seats is reserved for ST category making a total of 49.5%. Hence, the general category will now have around 2020 seats at their disposal, an increase from 1684 seats earlier.

Among the possible locations for new IIMs in the states of Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra are the likes of Pune, Patna, Shimla, Bhubaneswar, etc as several older IIMs are located in the capital of their states.

Capacity planning is key to successful roll out

While opening new IIMs is a positive move, the government must make sure to do advance planning before the final roll out. Adequate quality faculty and infrastructure must be assured for all these 5 New IIMs before they are allowed to function as a management institution.

We have already seen the fate of 6 new IIMs which were forced to function from a temporary building and also with lesser quantity of faculty members. Couple of these New IIMs are still to fully move out to their new and permanent building while the number of faculty which was as low as 5 in the beginning has now been able to reach the double figures.

Thus, keeping these in minds, we expect a stern and detailed step by the Narendra Modi government who is famous for his accurate planning and analysis before any final decision.

Other higher education announcements in budget 2014

Finance Minister also announced setting up of 5 new IITs. He said in his speech, “I also intend to set up five more IITs in the Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.”

A total sum of Rs 500 crores has been set aside by the finance minister for 5 new IIMs and IITs in the Budget 2014-15.

Currently there are 16 IITs in operation in India. There are set up at Mumbai, Delhi, Kanpur, Kharagpur, Chennai, Guwahati, Roorkee, Hyderabad, Patna, Bhubaneswar, Ropar, Jodhpur, Gandhinagar, Indore, Mandi and Varanasi. A total of 8862 seats are there in 16 IITs in India.

Although ISM Dhanbad is also usually considered among IITs and has a total of 1023 seats making the grand total as 9885 seats. In the general category 4,844 seats are available. 

Finance Minister also made some other beneficial announcements for improving education in India. In his speech he said:

- To take advantage of the reach of the IT, I propose to allocate a sum of `100 crore for setting up virtual classrooms as Communication Linked Interface for Cultivating Knowledge (CLICK) and online courses

- An amount of ` 28,635 crore is being funded for SarvaShikshaAbhiyan and `4,966 crore for Rashtriya Madhyamik Shiksha Abhiyan. A School Assessment Programme is being initiated at a cost of `30 crore.

- To infuse new training tools and motivate teachers, “PanditMadan Mohan Malviya New Teachers Training Programme” is being launched. I am setting aside an initial sum of `500 crore for this.

While the final outcome will take a long time to surface, for the time being management and technical aspirant should be happy as the chances of studying from the premiere institute of management and technology will increase.

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