Manipal University’s New Course of Action
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Image: Mallikarjun Katakol for Forbes India
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FINGER CROSSED Ranjan Pai (l) and Mohandas Pai have been friends for a long time
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anjan Pai first met Mohandas Pai in the late 1990s at the Infosys campus in Electronic City, Bangalore. Ranjan’s father Ramdas Pai was impressed by the bright chief financial officer (CFO) of a promising IT company and wanted his son to meet him. At first Ranjan didn’t quite take to him. But on his father’s insistence, kept in touch with Mohandas. “Every time I’d meet Mohan, he would give me 10 ideas and it was very stressful. He was always so charged. But slowly it started growing on me,” says Ranjan. A friendship bloomed between them and Mohandas decided that when he left Infosys, he would work with Ranjan and Ramdas.
Ranjan is the grandchild of T.M.A. Pai, who founded India’s first private medical college, Kasturba Medical College (KMC), in 1953. KMC spawned the 600-acre Manipal University (MU) where at present, 23,000 students pursue courses in close to 20 professional streams. Under Ramdas, and now Ranjan, MU has expanded to Nepal, Dubai, Malaysia and Antigua. The father-son duo also run 11 hospitals in south India.
With opportunities in healthcare and education booming, Ranjan believes that these two sectors are poised for growth. But there are some challenging issues. One, both are massively capital-intensive businesses. Two, they are tightly regulated by the government. And three, both businesses have long gestation periods.
And despite its international footprint, the Manipal group has not grown much outside its southern home base in India. In the healthcare business, it is much smaller than Apollo and Fortis.
There is another bigger issue — one of reputation. The Manipal brand name is synonymous with education as well as capitation. For decades, students and parents have thought of Manipal as a last resort where, if a child is unable to make it on merit, he/she can always get a seat by paying a higher fee. But this is no longer the case.
In the 1950s, Manipal was the first university to introduce the capitation fee system, where the higher fee paid by students helped fund the university’s infrastructure. As a private university, Manipal did not have any other option. “In India, unlike the West, there is no system of endowments, which are necessary to fund universities, so my grandfather had to ask students to contribute for it,” says Ranjan.
Later, Ramdas created another practice called ‘twinning’ that created two slabs of fees. NRI (non-resident Indian) and foreign students paid a higher fee and that in turn subsidised the fee for Indian students. For example, Malaysian students pursuing a MBBS degree from Melaka Medical College (MMC), a joint venture between Manipal University and the Malaysian government, spend the first two and a half years of the programme in Manipal, and return to Malaysia to complete the rest of the term. Besides the higher fee from the Malaysian students, MU also gets a few crores in royalty each year from MMC for the use of its name for the degree.
“It was a brilliant idea. Before this, Malaysian students were going to the UK and Australia to get a MBBS degree. Now, they can send three students for the cost of one to Manipal. It’s a win-win situation for everyone,” says K. Ramnarayan, vice-chancellor, Manipal University.
However, though these strategies financed the university, it also ended up smearing its name. From 1993, when Manipal acquired a deemed university status, the capitation fee system was removed. Admissions are now strictly based on a candidate’s performance in the entrance test.
At MU, there are stories of how Ramdas refused to admit even his own son at KMC because he couldn’t make the cut off. (Ranjan studied the first two years of his MBBS at Davengere, before getting transferred to KMC.) Ramdas says his wife and brothers did not speak to him for days after that. “Ramdas Pai is a stickler for rules and no matter who is calling he will refuse to grant admission out of turn. So, we have told him to turn off incoming calls on his mobile during admissions’ time,” says H.S. Ballal, pro-chancellor, Manipal University.
The ultimate endorsement comes from Mohandas who says, “After 17 years at Infosys, I had many job offers, but I turned them down. Dr. Pai [Ramdas] reminds me of [Narayana] Murthy. Both are institution builders.”
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