Eight years ago, the Indian Institute of Management, Kozhikode, began functioning in a modest building, with barely adequate facilities.

Today, atop a hill in idyllic settings on the outskirts of Kozhikode in Kerala, the sprawling IIM-K campus is the most picturesque of management institutes in the country. It is also the pioneer in satellite broadcast interactive education and digital libraries.

The credit for making IIM-K one of the top management institutes in the country goes to its director Dr Amarlal H Kalro.

"It was a challenge building an institution from scratch. But it is time for me to go," says Dr Kalro who bids goodbye to IIM-K this week after a five-year tenure.

In exclusive interview with Deputy Managing Editor George Iype, Dr Kalro shares his views on the various controversies confronting the IIMs in the country, especially in the wake of the recent government decision to cut student fees.

The human resources development ministry's decision to lower IIM students' fees has upset management experts and IIM faculty members. How do you react to the controversy?

At this point in time, the issue is very emotive. People are saying so many things. The whole issue has been blown out of proportion.

• The IIM controversy: Complete Coverage

Those who are raising a hue and cry on the issue should understand that the government has its own priorities. The government has also got the prerogative to take certain decisions.

The government of India invests in education. There is a place for, both, private and state-sponsored education. Private people charge what they want. The state determines its policies. In most countries, including the United States, this is the case.

Incidentally, in most countries in the world, the recovery of costs of education from fees will not exceed 40 per cent.

The fee cut has been criticized by people, even by IIM-A chairman and Infosys mentor N R Narayana Murthy. . .

I think you should address this question to them. But from what I have read, I get to know they think that lowering of the fees will affect the quality of education at IIMs.

I do not share the view that the fee-cut will affect the quality of IIM education. As far as the IIM-K is concerned, the slashing of fees will mean a reduction of Rs 1.7 crore (Rs 17 million) of revenues for us.

Which means the fee cut does not affect the IIM-K at all?

No. As of now, it does not affect us. But what happens in the future, I cannot predict now.

Do you think the fee cut will make IIM education more affordable to people, especially the poor sections of the people?

I can tell you that at IIMs, any student who wants an education loan gets it very quickly these days. In fact, instead of students going to the banks, the banks are coming to the students wanting to give loans.

Second, the amount of loan they take can be repaid very easily in a very short period of time.

Third, the banks are having very good repayment experiences. Therefore, I don't think that poor people have any difficulty in paying the tuition fees at IIMs.

I don't know whether enough poor people are applying for admissions at IIMs or not. As of now, nobody has felt the need to forgo IIM education because of lack of money.

There is an allegation that IIMs are only meant for the elite and the rich people in the country. Your comments?

IIMs have not discriminated people as rich and poor.

Do you think the fee cut will affect the quality of education at IIMs?

I do not think so. As far as IIM-K is concerned, it does not affect us at all. We will continue to maintain the quality that we have today. But in the long run, it depends whether the government will provide the funds we need for maintaining our standards.

One allegation is that while IIM graduates are qualitatively good, they lack good communication skills and are inexperienced if you compare them with graduates of American business schools. Do you agree?

No, I don't agree with this comment. At most IIMs, and especially at IIM-K, we are consciously admitting students with work experience. The average work experience of our students is reasonably high.

If our students were not good enough, companies would not recruit them.

On the contrary, students who are coming back to India for employment after getting their MBAs abroad find it very difficult to get a job here. This is our consistent experience.

Indian companies prefer to recruit from IIMs rather than from a second-rate American business school.

IIM graduates are educated with taxpayers' money. Do you think they should get appointed in government organisations and public sector undertakings?

I want to ask you a question. Doesn't the government also subsidise your existence? Every one of us in India is a beneficiary of government action taken in the context of development. Not subsidies alone.

Take the simple case of cooking gas, LPG (liquefied petroleum gas). Everyone benefits from LPG subsidy. The government is also subsidising school, medical and engineering education. So everyone in India is benefiting one way or the other.

So why is the media always blaming the IIMs as elite and as living under taxpayers money?

There is a view that the group discussion and interview process for the IIM entrance should be abolished. Even the best American business schools do not conduct group discussions and interviews.

I do not agree with this viewpoint. At this point in time, I am all for continuing group discussions and interviews for IIM admissions.

What has been the placement record in IIM-K?

The placement record at IIM-K has been excellent, particularly for an institution so young. We have consistently placed our entire graduating batch of 60.

The kind of companies which recruit from IIM-K are in no way different from the companies that recruit from other IIMs.

Two years ago, it was an IIM-K graduate who was offered the highest salary amongst all IIM graduates. Last year, the second highest salary came to IIM-K. This year, the placement was fully over on the first day of recruitment; 102 offers were made for 59 people. Everybody has been placed.

Over the past few years, how much grant has been the IIM-K receiving?

I do not have the exact figures right now. But we have been getting our funds regularly from the government of India. Originally the government of Kerala was supposed to take care of 40 per cent of our costs, but we have not got any money so far.

The state governments also support other IIMs with grants?

No, I do no think so. But when IIM-K was established, there was an agreement with the government of Kerala that it would provide 100 acres of land and would pay 40 per cent of the capital cost. The government gave us 97 acres of land; but it has so far given only a little amount towards the capital cost.

Do you think IIMs in India are perfect as they are today?

There is scope for improvement everywhere, including at the IIMs. For instance, we would like to further improve the quality of our education and the diversity of education we offer. We would like to become more efficient in the delivery of education. We would like to make better use of our infrastructure. We would like to build better information resources centers.