B-Schools protest RBI’s new policy

From our special correspondent, Mumbai

Premier business schools throughout India have taken strong exception to the Reserve Bank of India policy to allow the Indian rupee to appreciate to control inflation. This move by RBI will adversely affect the image of the premier business schools in India and the glorified employment exchange institutes might not retain their attractiveness for long in this current economic climate.

“With the placement season just around the corner and many top notch schools expecting huge dollar salaries, this news comes as a major disappointment” says Akshay, a member of the placement committee of a premier management institute. After the placement season is over, the b-schools cite ridiculously high salaries by converting a dollar salary into its rupee equivalent using the prevailing exchange rate. Purchasing power parity, a very important concept taught in their economic courses, is forgotten very conveniently. With an appreciating rupee, these high salaries will come down and panic has set in the campuses that this year’s salary will not exceed the last year’s highest salary. On the condition of anonymity, a student from the premier management institute in western India told us,” This current economic situation is compelling us to use our imagination and stretch our creativity to the maximum. One possible solution is to use a three way exchange. Convert the dollar to the Yuan and the Yuan to the rupee. Since China has the wherewithal to withstand the pressure from the US to appreciate its currency and the liquidity of Rupee-Yuan being low, we can boost our rupee salaries and beat last year’s numbers. This is what we do sitting in London for USD 100,000 per annum. I didn’t expect that we have to use our skills during our college days itself!”

A few days after the announcement, RBI stepped in to stop the rupee appreciating too much and bought dollars to keep the rupee above the 44 mark. This is a very strange coincidence and makes one wonder the power of the alumni of these highly regarded institutes.

Have these institutes lost touch with the common man and are only worried about their salaries and not the price of an onion? Are these students on whom the Indian government spends so much not bothered about India but are only looking to exploit the Indian growth story? This doesn’t augur well for a Poised India and one fervently hopes that this is not true.