Tuesday, June 25, 2013

My Problem with Finance Companies

I've been involved in a recent spat on an online forum with my peers regarding the value that JEE ranks give to an IIT. My empirical reply was that recruiters don't care for JEE ranks but technical knowledge and, outside the top 100 ranks, the two have a somewhat inverse relationship, for a variety of reasons. I myself am someone with a very pathetic JEE rank but finishing with a silver medal in the end; on the other hand, I have seen titans who opened their branches getting a beating and dropping off to the netherworld in the end. And placements was the battle royal of it, with JEE ranks finding no mention anywhere.

However, I was quickly cut short by a counter-opinion that JEE ranks matter because finance companies (which is an umbrella term for banks, traders, financial consultancies etc.) do not come to Roorkee since it does not attract the top 500 among the JEE crowd. And then came the idea of publicity and how having AIR 1 in your institute gives it an aura that simply cannot be missed. I admit, all these arguments are correct - engineering and finance are miles apart and such companies do genuinely value the analytic skills of JEE students over the engineering skills they acquire at an IIT. In that respect, it does matter.

However, I have a counter-question: do finance companies matter? I'm not trying to impose my opinion on anybody, I am certainly not a socialist. But, facts speak and in this case, they say it loudly: the finance industry employs less than 1% of Indians, that in a country with millions of unemployed youth. It does not create any physical assets on the ground whatsoever, be it food or housing. In a country that has more hungry people than sub-Saharan Africa, in a country where thousands of farmers commit suicide every year, I really cannot see the point of an industry that contributes virtually nothing on the ground.

But then, so what? If people want to work in an industry that creates money from money and finally lands up with money, what's wrong with it? Nothing at all, except when it's the working class that is expected to pay for it. After all, the country spends a disproportionately high percentage of money on an 80% subsidy of IIT tuition. That, at the cost of spending less on so-called less talented students who study in other colleges in India. The reason for that is that these super-intelligent students are supposed to be able to contribute more to society. But as I've already shown, finance companies contribute virtually nothing.

Again, I emphasize that I am not socialist, but I am fair. If someone wants to become very rich, they have every right to do it but not by fleecing the general public. IIT students who join finance companies, I think, should be asked to pay back their entire subsidy. They do not deserve to have their luxuries subsidized by those who do not have the luxury to dream. Even on a purely capitalist perspective, it is wrong - the earnings of a man should go towards his own growth, not be used to subsidize somebody else's growth: that is plain crony capitalism. And we are talking about luxury here, not subsistence, so this is actually an income redistribution of the most perverse kind.

Now, one argument is that these finance companies create a massive amount of wealth and the income tax from that makes up for the subsidy. That is again, a very perverse argument. FICCI says that 75% of Indian engineering students are unemployable, if the money that goes into the IITs would go into making at least half of these employable, it would generate jobs on a much larger scale, something that mere income tax is not going to fix. A pure financial equation is not of the order here - it is a matter of where a country's priorities are.

And therefore, I conclude that if JEE ranks are important in order to attract finance companies, then JEE ranks should be the least concern of any IIT. It is not desirable to beg and grouch in front of companies that don't give a penny for the engineering skills imparted in the IITs yet walk away with the brightest in the land. They are, of course, free to take them in an off-campus arrangement, but at least on-campus, they should be shown the door.