P.S. This may well be the first ever post on the Indian economy which uses the sentence "Stanford + Harvard joint reference FTW!".
- Finances: How could such a small investment be considered a bad one? It seems to me that the one and only reason that the IITs are being beaten up on is that they are run by the government and so there are some intellectual possiblities in terms of arguing against them. But still the argument is a ridiculous one. I am no fan of socialism and indeed have much more in common with the Chicago School than with Nehruvian socialism (which gets a bashing in this here related post by Atanu Dey : http://www.deeshaa.org/2006/05/14/imagine-no-reservations/) But even so, I am not so blind as to not see the benefts of institutions, especialy when they can be run for as little money as the IITs are run for.
- Externalities: And furthermore, how can one possibly not see the positive externalities of an institution such as the IITs? The externalities are in terms of research into science and technology, yes, but the externalities are far more than just that. Promoting a culture where science is respected and scientists are respected, not trashed as nerds, is surely a good idea for a country like India where the technical talent pool is huge and - what's more - easily monetizable.
- Organizational: And then, there is the organizational aspect. Many people have told me that they did not understand how an organization should be run until they saw the IITs. Even if there are other examples now available (for instance, MNC run companies), it is hard to miss the important role these institutions played in India in the 50's, 60's and 70's.