Man Who Helped Set Up ISB Reveals Why It Was Established In Hyderabad, Not Chennai Or Mumbai

Renowned educational consultant Dr Pramath Raj Sinha in a recent interview highlighted the challenges faced in establishing non-government educational institutions in India. 

In an interview given to a popular YouTube channel, Dr Sinha, the founding dean of the Hyderabad-based privately run Indian School of Business (ISB) and who has been instrumental in setting up several other noted educational institutes like Ashoka University, recounted the hurdles faced while setting up ISB.

Dr Sinha revealed that ISB was initially supposed to come up within the union government-run Indian Institute of Technology (IIT), Delhi campus as one of its educational branches. 

The team spearheading the project as stated by Dr Sinha consisted of Rajat Gupta and Dr Sinha, both employees of the United States (US)-based consultancy firm McKinsey and Company and a group of Indian industrialists comprising YC Deveshwar of the ITC, Adi Godrej of the Godrej Group, Anil Ambani of the Reliance Industries, Anand Mahindra of Mahindra and Mahindra, Rahul Bajaj of the Bajaj Group among others.

According to Dr Sinha, after realising that there would be several restrictions while operating the institute as a part of the union government-run IIT, they decided to establish ISB as an independent institute. 

As recounted by the educational consultant, Mumbai was finalised as the campus location of the proposed management institute since most of the ISB's founding team members were from Mumbai.

"The urban planning agency of the Maharashtra State Government allocated us a plot in Kharghar, Navi Mumbai. This was around 1998. Just when architectural surveys and other formalities were done, state government officials started levying additional development charges on the project which led to huge cost escalation," Dr Sinha, the founding Dean of the ISB said.

Since the Shiv Sena-Bharatiya Janata Party (BJP) coalition was in power in the state then, the founding members, according to the consultant, decided to meet Shiv Sena Chief Balasaheb Thackeray to raise their grievances against the administration. 

"However, even before the team could raise their issues, Thackeray boasted to a journalist sitting there that ISB would have 100 per cent reservation for Maharashtrians in faculty recruitment and 50 per cent reservation in academics for the youth from the state. The team panicked and decided to move the proposed institute elsewhere," Dr Sinha added.

After making the plans to move the proposed institute elsewhere, Dr Sinha said that the state governments of Karnataka, Andhra Pradesh, Tamil Nadu and even Gujarat contacted the founding team and expressed their interest in the project.

Chandra Babu Naidu, a young first-time Chief Minister of Andhra Pradesh back then personally wrote letters to all the ISB board members and urged them to set up the business school in Hyderabad.

“Hyderabad was much behind Bengaluru back then. But Naidu was determined to make it a strong competitor to the latter. After reaching the city, he sent the seniormost state bureaucrats to show us the site. Later we were taken to Naidu's official residence. The level of respect and interest shown by him was such that he and his wife served breakfast to the team members with his own hands," Dr Sinha said.

As said by the educational guru, Naidu urged the members of the founding team comprising India's topmost business tycoons to also consider setting up their factories in the state. 

"To prove his commitment to developing the state, he also showed them a presentation titled: Hyderabad - The Knowledge Hub Of Asia. He was aware that we were also going to Bengaluru and Chennai. He said that the Andhra Pradesh Government was ready to offer double of what is promised by Karnataka and Tamil Nadu," Dr Sinha added.

The educational consultant also shared anecdotes of the treatment received by the founding team from the chief ministers of Karnataka and Tamil Nadu.

“We were supposed to meet the Karnataka chief minister on the same day. But because we got delayed in Hyderabad and reached Bengaluru late. This did not go down well with the then-Karnataka chief minister. He did not even get up from his chair to greet us,” Dr Sinha said.

According to Dr Sinha, the founding team did not like the site shown by the Karnataka state government as it was next to an automotive factory in an industrial area.

"Then we went to Tamil Nadu where the state government had offered us a 'lakeside plot.' However, after visiting the site, it turned out to be a swampy land with a pond offered far from the rosy description given by the state government,” he said.

"We were subsequently taken to meet the then Tamil Nadu Chief Minister J Jayalalitha. Here the founding team members were asked by the state bureaucrats to offer garlands to her. This was contrary to the respect we received from Andhra Pradesh Chief Minister Naidu in Hyderabad. Hence, considering his proactiveness, we finalised Hyderabad as the campus location for ISB," Dr Sinha said.

Apart from the challenges faced in scouting a suitable location for the management institute, Dr Sinha also spoke about the challenges faced by non-government institutes in getting recognition for their courses by regulatory authorities like the All India Council of Technical Education (AICTE) and the University Grants Commission (UGC).

"Institutes offering standalone technical courses have to get approval from the AICTE. The officials from the agency were delaying clearance of the ISB’s proposed management courses. When the chief finance officer of the project made an enquiry, it turned out that unless we paid a bribe of Rs 1 crore, AICTE recognition would not come through. 

"The founding team was clear that we will not pay the bribe. This is why ISB chose to go independent without AICTE’s recognition,” Dr Sinha said.