 FINANCE AND ITS MANAGEMENT

5.1 Plan Funds

5.1.1 Areas for Which Funds are Required

All the IITs presented to us documents containing their estimates of requirements for the Seventh Five Year Plan. Table 5.1.1A gives Seventh Five Year Plan requirements item-wise IIT-wise. The total Seventh Plan requirements of the IITs included in these estimates come to Rs. 258 crores. The estimates range from 67 crores of IIT Kharagpur to 38 crores of IIT Bombay. The activities proposed by the IITs cover strengthening of the departmental activities, work on thrust areas and emerging areas, augmenting central facilities, making good critical gaps in infrastructural facilities including housing and campus development. The total equipment requirement is indicated as Rs. 85 crores. The recurring expenditure estimates for faculty and non-faculty including working expenditure totals Rs.40 crores for all the IITs. During our visits to the IITs, they presented to us detailed descriptions of their current and future work programmes. They emphasised that their work programme in thrust areas and emerging areas are increasingly related to the priorities identified in the S&T core sector. There can be no two opinions about this thinking and approach. We feel that the IITs must be consciously and adequately supported and enabled to achieve their potential by provision of the needed infrastructural facilities and promoting conditions for excellence in research. To this extent meeting the plan needs of IITs become critical, for, it ultimately contributes to the S&T components of the national perspectives in particular and 'National Development in general. We are, therefore, happy to see that the enthusiasm of the IIT faculty for work in the leading areas of thrust. While their Plans have to be examined in detail by the Academic Advisory Committee of the Council of the IITs (Para 6.1.2), we would emphasise that their critical requirements need special support basically in four main areas.

The first aspect of their plan requirements is the removal of obsolescence and updating their equipments and other experimental facilities. The IITs were set up over 25 years ago and the oldest of them, IIT Kharagpur, did not receive any substantial foreign assistance. Their equipment including instruments in the laboratory became increasingly obsolescent over the years thereby impairing their ability to remain as leaders in Research and Development and Consultancy work. This has been prominently brought out in the Sahai Committee Report. The other four IITs were initially supported by foreign assistance, but, the problem of obsolescence in their cases too was noticed by the Sahai Committee in 1977 and is more real today. The Sahai Committee had observed as follows:

"Almost all the IITs raised the question of lack of funds for replacement of unserviceable and obsolete equipments. The Committee noted that there is no specific allocation of funds either under non-plan or plan for this purpose...... the Committee considers that a logical approach would be to treat replacement needs of small value equipments, arising out of wear and tear and breakages on an item by time basis as legitimate non-plan expenditure and for this purpose suitable annual provision should be made in the non-plan funds. All other equipment needs which include removal of obsolescence, modernisation of laboratories etc. should be reflected in the plan allocations. The IITs should be required not to treat this merely as a provision for replacement of obsolete models by more modern versions, but consider modernisation as a complete project involving study and improvement of the processes and techniques involved in the various laboratories and workshops and matching equipment provision with those requirements. This kind of futuristic planning must, more

or less be a continuous exercise in the IITs and unless this is done, the Committee feels that high-cost equipment acquisition will over a period of time, result in unbalanced growth and will not keep pace with the requirements of the changing needs of Science, Engineering and Technology in the country"

We are aware that in recent years non-plan grants to IITs include a special provision for replacement of equipment of small value when they are wasted out by use. Table 5. 1.1 B indicates the amount utilised by the IITs for replacement of equipment and computer facilities. This has helped to some extent. However, the IITs could not obtain adequate plan provisions for modernisation, although recommendations are available from 1977. The problem has since aggravated and has assumed greater dimensions. Our examination of this problem of obsolescence indicated:

- Not all ranges of equipments have become equally outdated but updating is required more critically in the range of equipment in the electronic field. Equipment in use in some areas of engineering sciences, also need modernisation to cope with the scientific advances that have taken place in that field.

- For many years, no budgetary support was provided for making replacement of wasted-out equipment. However, from 1983, Ministry of Human Resource Development has started to provide funds for this purpose. The amount provided has proved inadequate in the context of the staggering backlog for replacement.

- A good part of funds needed for modernising existing facilities and for creating new facilities can be met by careful planning in the application of funds for equipment out of the sponsored research projects of government agencies and industry. This is not to deny that the IITs must have certain basic equipments in order to bid for the R&D funds from scientific agencies and Industry.

- Some of the equipments in the laboratories are now not in working order due to non-availability of spares. Many of them were donated to the IITs under various Aid Programmes and there was no provision for continuous supply of spares.

- There is need to achieve and enhance the capability of the Instrument Technology and Repair Divisions to record inhouse support in upgradation.

- The obsolescence is rapid in computer related disciplines. The change in Computer applications viz. from the, data capture and processing to design and control in many fields underscores the compelling need for upgrading the computing facilities in the campus as training of IIT students in these areas is of vital importance.

- In the area of production with the advent of Robotics and Automation, the scenario has been completely changed by CAD/CAM. If the Indian Industry is to have students having competence in these areas, the laboratory (and teaching) in the IITs must suitably change.

- Old equipment need not-always be scrapped. It offers many possibilities for students' training. Some of these could be put to use in Engineering Colleges or schools needing them. By doing so the recipient gets the equipment free, and the much needed laboratory space in the IIT is saved.

- Old equipment and equipment not in use are sometimes useful teaching supports. Therefore, it is not necessary to assume that equipments not working are useless. The IITs (and, within the IIT, the individual departments) should themselves carefully conduct a survey and list out equipments that could be donated or sold.

- Problems of obsolescence are universal and are corollaries of fast change in technology and engineering sciences. The least that we can do is to ensure that premier institutions like the IITs are not disabled by build-up of massive obsolescence gaps in teaching and research infrastructure.

- Some suggestions were made to us that each IIT could concentrate their research in some specialised subjects so that other IITs need not spend money on duplicating. We would suggest that this should be kept in mind so that in areas which require provisions of costly equipment, one IIT should develop a nodal centre, and, faculty and other staff from other IITs and other Institutions should share access to these facilities.

It is critical that, in addition to the existing Non-Plan grants for replacement of equipment which needs to

be enhanced there is a need to provide plan fund support to execute projects/programmes of obsolescence removal and laboratory and workshop modernisation.

The second critical aspect of the Plan requirements of the IITs, relates to the campus facilities particularly deficiencies in faculty housing, hostels, library and laboratory space. Table 5. 1.1 C indicates the space built in IITs and Table 5.1.1D indicates the shortage of space in the IITs. The IITs should provide hundred percent housing for the faculty and also have a little more spare faculty housing to attract adjunct and visiting faculty. At present, we understand that due to shortage of houses for teaching staff (Table 4.9.3D) in these campuses they are not able to 'attract competent and qualified people. Similarly there is shortage of hostels particularly for girl students. There is a need for expanding Central Library building and for building some more Laboratory space. The overall shortage of space is shown IIT-wise in Table 5.1.1D. These should, therefore, be remedied forthwith.

The third area where Plan-funds are essentially required by IITs is good computation facility. Computing power per second is an index of the capability of any technological institution. The data processing requirements of IITs have increased manifold. The existing computers with a main frame centrally located is inadequate to meet even the current needs. Advances in Science and Technology, on the one hand and advances in computer application on the other, in mutually complementary roles are accelerating the change process. In this context, teaching and research related to manpower development for S&T thrust areas and emerging areas depends for its strength and quality on the computing resources of the Institute. Gaps in computer resources in front rank technology institutions would then be a great misfortune. Selected Institutions in India like IITs now need a Super Computer supported by many dedicated terminals at the laboratories and on the tables of the faculty. This has become a minimum requirement. We learnt that in a small Institute like the Asian Institute of Technology, Bangkok, they have a number of computer consoles, whereas IITs still have to go to a Central Unit for necessary computational work. IITs in this sense are no longer comparable even to some of the smaller Institutions located abroad. Their capability and reputation, in this sense as leading-edge institutes, are now being impaired.

Similarly some of the equipments available in the IITs mostly received under the foreign assistance, could be made serviceable provided there is a Central Instrumentation Service which also could get enough spare parts. Such Central Instrumentation Unit could save on the need for replacement by energising equipment currently not working. Repair or reconditioning of the existing equipment is an important aspect which IIT could do, as they have sufficient technical competence and manpower. Such efforts add to the development experience for their staff which in turn will enhance the quality of training and education in the IITs.

The fourth area for which Plan funds should be made available in sufficient measure is to support the work programme of IITs in S&T thrust areas. We have already referred to the possibility (and necessity) of finding the funds not only through the grants of the Ministry of Human Resource Development but also through sponsored research funds on project basis from Government of India agencies as well as Industry. The role of the IITs in supporting the national R&D effort in relation to thrust areas have to be fully recognised and their resources and capabilities for performing their role enhanced. There is considerable enthusiasm and keen interest among the faculty and research students to actively get involved in research and project work in such areas and this potential should not be allowed to suffer for want of essential facilities and appropriate funding. Investments in IIT to support related work programmes are doubly fruitful since they provide a strong motivation to the IITs to look ahead and excel in their research function but also contribute manpower in such advanced and sophisticated areas of work for this country. We wish to particularly emphasise that areas may be carefully selected, but funding should not be sub-critical. Each work programme must be projectised, with specific R&D goals, and in a feasible time-frame, and support provided after expert scrutiny and appraisal. In the past, support had been given but funding had been sub-critical in some cases and in some others, R&D goals had not been clearly identified while setting up facilities. Table 5. 1.1 E lists the support to work in emerging areas in the past.

Having regard to the past experience and the uneven flow of sponsored research funds from S&T agencies to the University systems (including IITs), we are tempted to conclude that the important work

that institution of higher technical education can and shall do in the S&T thrust areas, is not sufficiently acknowledged. We think that the S&T agencies could be asked to earmark 5% of their R&D budget for funding sponsored research work in the higher technical education system.

5.1.2Need to Provide Critical Plan Funds

We received strong representations from the IITs that the plan funds for the IITs in real terms have shrunk in the successive Plans and the IITs felt a considerable constraint in the actual availability of the Plan funds and on time. Whenever the IITs presented their Plan requirements initially, they included funds for innovative programmes but ultimately because of short-funding, the Plan funds could barely suffice for ongoing activities. When the scholarship value was raised, the increased liability was adjusted in the Plan budget though any change in value, like salaries etc. ought to be a charge on Non- Plan funds. The IITs pointed out that the Plan funds in the successive Plans were more or less of the same order and if one allows for inflation, the plan support became even less. Table 5.1.2 indicates the allocation of Plan funds to IITs during Sixth Plan. Out of Rs. 39 crores, IIT Kharagpur and Bombay got over Rs.8 crores each while the other IITs got less than Rs. 8 crores. IITs have felt that the order of funding them is low and needs largescale improvement.

The IITs have been dependent almost solely on the Government for their development. They have been no doubt getting sponsored research funds from S&T agencies but these again happen to be predominantly from the Government as most of the S&T agencies are Government Departments. It is now necessary and essential for IITs to use their talents and capabilities to generate resources from alternative sources like Industry, both in private and public sectors. A suggestion was made to us that Public Sector should support the development of IITs more substantially. It could be examined if one giant public sector unit adopts an IIT each and helps out with funds for infrastructure and R&D facilities as a quid pro quo for a lasting R&D/consultancy support to the public sector unit itself and using this linkage to strengthen the bonds between IIT and Industry. If such a linkage is possible, the IIT can develop more flexible options in resource mobilisation and a greater freedom of choice in building up its R&D facilities.

We have earlier referred to the estimates of plan fund required by the IITs during the Seventh Plan totalling Rs.258 crores.We have also dealt with, in a conceptual framework the essential areas where plan funds would be most needed. We have, elsewhere in the report (Para 5.2), dealt with the need to generate additional resources, within the IITs, to obtain part of the funds for modernisation of R&D facilities from S&T agencies under sponsored projects, to strengthen the bonds in the industry and the consultancy function both of which could bring in additional resources to the IIT. It is possible that in the process of a detailed and expert scrutiny of the Seventh Plan estimates, the requirements could be scaled down somewhat. Even after allowing for all these, we are of the considered opinion that the recommendations of Rs. 50 crores in the Steering Group Report (Dec. 1984) on Education and the provision of Rs. 35 crores ultimately in the Seventh Plan document is wholly inadequate and could prove to be a severe handicap in the desired growth profile of the IITs. Our view is that Rs. 100 crores would be a modest and reasonable plan grant to the IITs.

5.2 Non-Plan Funds and Block Grant

IITs have both Non-Plan and Plan components in their budgets. The Non-Plan component generally accounts for maintenance of activities as reached by the end of the previous plan period. The Non-Plan budget includes salary and allowances, scholarships to students, maintenance of buildings, and provision for replacement- of equipment etc. Table 5.2 A and Figure 5.2 give IIT-wise a Non-Plan budget grants from 1974. The past decade has shown a very substantial increase in the Non-Plan budgets of the IITs. While much of it may have a rational explanation, it is needless to emphasise that there has to be a check and scrutiny on the growth of the expenditure. The IITs have more or less reached their saturation points with regard to student population. It will, therefore, be all the more appropriate to seek and work for a containment of non-plan budgets. We have reasons to make this observation since during our discussions we could not avoid the impression that there is not enough awareness in the IITs of the fact that almost the entire cost of education and training of students is in reality paid for by the tax payer and that the

Government/the tax payer/the IIT system ought to be looking for all possible avenues of effecting cost reduction and economies of operation to improve the cost-benefit ratio of this tax payer's investment in the future of the country.

During their discussions with us, an Employees' Union of an IIT assured us that they are interested in the cost-effectiveness of the investments made. As long as none of the existing employees is laid off, except by attrition, retirement etc., they indicated their support for containing fresh recruitment. They felt that the main drawback in the IIT system is that there is no proper placement of its staff. In many laboratories and workshops, the placement of staff is irrational. Some of the workshops were without supervisors whereas some others have little or no mechanics. The Union felt that (in that Institute) while the overall ratio of supervisor-mechanics is satisfactory, the wrong placement or misplacement of persons hampered output and that there was no proper utilisation of the work resources. There should be constant awareness on the part of the IIT management for the effective and optimum utilisation of the human resources, including their training and retraining for specific jobs in the IIT rather than recruiting more staff. It was also pointed out to us that a number of staff have been employed in excess at some places and IIT could shift few surplus staff from one department to another, support programmes that go to increase their efficiency and make sure that there is adequate work available in every department. We appreciate the general sense of these perceptions and endorse them. Generally there is a feeling that the teeth-to-tail ratio is rather large in the IIT system. We think that recruitment and utilisation of the supporting staff is one of the major areas of scrutiny if containment of the non-plan budgets is to be achieved. We give weight to what the particular Union told us because it is an in-house testimony to what we consider as conveniently feasible if the IIT managements become more cost conscious.