Indian Institute of Space Science and Technology

Thiruvananthapuram

B Tech Economics Project

A
Study Report on

Impact of IIST on the Local Economy and Societal

Welfare : Estimating the Demand Side Effects

Submitted by
B Tech Aerospace 2014 Batch

Group Number 3

October 2015
Department of Humanities
Indian Institute of Space Science and Technology
Thiruvananthapuram

Economics Project

A
Study Report on
Impact of IIST on the Local Economy and Societal
Welfare : Estimating the Demand Side Effects
Submitted by
B Tech Aerospace 2014 Batch

Group Number : 3
Members
Angshuman Bhardwaj, Jaykrishnan S, Md. Sabir Alam,
Uppara Prudhvi Sai, Vishak Sasidharan
October 2015
Department of Humanities
 Declaration

This project report titled Impact of IIST on the Local Economy and So-
cietal Welfare : Estimating the Demand Side Effects is a presentation
of our original research work. Wherever contributions of others are in-
volved, every effort is made to indicate this clearly, with due respect to the
literature, and acknowledgement of collaborative research and discussions.

Date: October 26, 2015

Name SC Code Signature

Angshuman Bhardwaj SC14B003
Jaykrishnan S. SC14B017
Md. Sabir Alam SC14B030
Uppara Prudhvi Sai SC14B042
Vishak Sasidharan SC14B057

i
 Acknowledgement

First and foremost, we would like to thank Dr. C.S.Shaijumon, Reader in

Economics, Department of Economics, Indian Institute of Space science
and Technology for presenting us with an opportunity to do some research
work and get a first hand feel in field work. We are also indebted to him
for the guidance he has provided whenever we have consulted him.

We would like to express our special gratitude to the people working in

the Administration of IIST for providing us the data regarding the
student and staff population in IIST.

Our heartful thanks to the Finance Team of Dhanak, especially Abhinav

Kumar of second year, for helping us get the finance information about
Dhanak.

We are grateful to www.typeform.com which helped us in conducting the

online survey in an organised and attractive manner.

We also thank all the people who have helped us by voluntarily taking
part in the survey, both inside and outside the campus.

ii
 Abstract of the study

Higher Educational Institutions have a very important role to play in na-

tional and local development. As an income-expenditure flow, the effects
can be broadly classified as - demand side effects and the supply side ef-
fects. The current study makes an attempt to analyse and estimate the
economic impact of IIST on its locality from the demand side effects using
a simple expenditure model. The study also tries to understand the impact
from the grass-roots level in terms of developmental indicators for soci-
etal welfare related to IIST. While the methods have been conservative, the
results present a significant and promising picture of development.

iii
Contents

1 Introduction 1
1.1 Introduction to the topic . . . . . . . . . . . . . . . . . . . 1
1.2 Importance of the Topic . . . . . . . . . . . . . . . . . . . 2
1.3 Objective of the Study . . . . . . . . . . . . . . . . . . . 4
1.4 Plan of Study . . . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Methodology of the Study . . . . . . . . . . . . . . . . . 8
1.6 Hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.7 Possible Limitations of the Study . . . . . . . . . . . . . . 11

2 Literature Review 13
2.1 Common Models for Analysis . . . . . . . . . . . . . . . 14
2.1.1 The ACE Model or Caffrey-Issacs Model . . . . . 14
2.1.2 Simplified ACE Model by Leslie and Lewis . . . . 15
2.1.3 Alternative to ACE Model by Fernandes,Cunha and
Oliviera . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.4 Ryan Short-Cut Model . . . . . . . . . . . . . . . 17

iv
 2.2 The case of the University of Alcala, Alcala de Henares,
Madrid, Spain (Garrido & Gallo-Rivera 2010) . . . . . . . 19
2.3 The case of Polytechnic Institute of Braganca, Portugal
(Fernandes, 2013) . . . . . . . . . . . . . . . . . . . . . . 22
2.4 IIT Impact Study, 2008 . . . . . . . . . . . . . . . . . . . 24
2.5 A Note on Measuring the Impact of an HEI (Brown and
Heaney 1997) . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6 Considerations for the Current Study . . . . . . . . . . . . 34

3 The Surroundings of IIST 35

4 Data Collection Methods 39

4.1 Online Survey . . . . . . . . . . . . . . . . . . . . . . . . 39
4.2 Field Survey . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.3 Secondary Data . . . . . . . . . . . . . . . . . . . . . . . 41

5 Observations and Analysis: Quantitative Study based on Stu-

dent Expenditure 42
5.1 Distribution of survey samples . . . . . . . . . . . . . . . 43
5.2 Variations in Expenditures . . . . . . . . . . . . . . . . . 45
5.2.1 Expenditures in Food . . . . . . . . . . . . . . . 45
5.2.2 Expenditure on Transport . . . . . . . . . . . . . . 46
5.2.3 Expenditure on clothings . . . . . . . . . . . . . 47
5.2.4 Expenditure on stationary items . . . . . . . . . . 48
5.2.5 Body care . . . . . . . . . . . . . . . . . . . . . . 49

v
 5.2.6 Visitors Expenditure . . . . . . . . . . . . . . . . 50
5.2.7 Major one time expenses . . . . . . . . . . . . . . 51
5.3 Overall Estimation . . . . . . . . . . . . . . . . . . . . . 51
5.3.1 Program wise Comparison . . . . . . . . . . . . . 51
5.3.2 Total expenditures . . . . . . . . . . . . . . . . . 52

6 Qualitative Study: Based on Field Survey 55

7 Conclusion 63

Appendices 67

A Student Expenditure Survey Questionnaire 68

B Shop Survey Questionnaire 76

C Staff Survey Questionnaire 78

vi
List of Tables
3.1 Some of the Regional indicators . . . . . . . . . . . . . . 37
3.2 Number of students and faculty worked in corresponding
Academic year . . . . . . . . . . . . . . . . . . . . . . . 38

vii
List of Figures
1.1 Regional Effects of University.[6][7] . . . . . . . . . . . . 6
1.2 Classification and Examples of Economic Effects of Uni-
versities. Source: Lambooy(1996) and modified by Pal-
lenbarg(2005)[13][7] . . . . . . . . . . . . . . . . . . . . 7
1.3 Input and Output from an University. Source: Stokes(1998)[10][7] 7

2.1 Economic Impact of a HEI based on the ACE Model.[7][2] 15

2.2 SubModel B1 of the ACE Model. The Monetary flow re-
lated to the HEI that influences local business volume.[4][2] 16
2.3 Alternative to ACE Model proposed by Fernandes[4]. . . . 18
2.4 Economic Base Approach.[3]. . . . . . . . . . . . . . . . 32

3.1 Fig showing Distribution of Villages, Towns, Development

Blocks and Panchayats. . . . . . . . . . . . . . . . . . . . 37
Chapter 1

Introduction

1.1 Introduction to the topic

Institutions of Higher Education1 often play a pivotal role in the devel-
opment of a community and a nation at large. They are key centers of
human resource development and are incubation centers of knowledge and
research; and these have a crucial role in building the bridge for a nations
development through innovations and a skilled workforce to make use of
that technology.
Moreover, Higher Educational Institutions (HEIs) generate important
economic benefits: for the region where they are located, through the
income and jobs they create; for individuals, through higher lifelong in-
comes and other benefits; and for the government, through higher tax rev-
enues.[4]
1 In the Indian context, higher educational institutions refer to the universities and colleges offering
courses after a +2 level study or in some cases matriculation

1
 They also bring in a slew of infrastructural developments to the re-
gion. And as most of the HEIs come up in regions of previously mid level
of development (typically between completely urban and completely rural
regions) due to the necessity of acquiring large amounts of land, this often
means a great upgradation in the region in terms of roads, transport, waste
disposal etc - all important indicators of development. And infrastructural
development has a close relationship with economic growth of a region. It
is a very important factor that determines where economic activity gener-
ates and the kinds of activities that flourishes within the economy [16].
As such, the Higher Educational Institutions (HEIs) hold a major role
in the economic development and the societal welfare of the region in
which they are established. This has motivated us to consider the develop-
ment that the Indian Institute of Space Science and Technology (IIST) has
brought about in its locality and we try to analyze certain aspects of it in
this study.

1.2 Importance of the Topic

The higher education system in India is the third largest in the world after
USA and China. As of October 2015, India has 46 central universities[20],
336 state universities[21], 130 deemed universities[17] and 50 Institutes of
National Importance[18]. Some of the most popular HEIs are the IITs2 ,
2 Indian Institute of Technology

2
NITs3 , AIIMS4 , IISERs5 ,IIMs6 ,Delhi University, University of Mumbai
etc. And given the huge young population in India,there are several de-
mands for more such institutions. Setting up of an IIT and a AIIMS in
each state has been a long stated demand of many and widely politicised
too; also a promise of the current central government. Leaving aside all
other concerns like faculty requirements etc, is there enough public money
to fund these institutions? Are they contributing enough to the nation in
return to justify their costs, considering that these usually attract the more
priviledged sections of the society as their direct beneficiaries[5]?
These are questions that often come up while discussing the funding
to institutions and given financial constraints, there exists a heirarchy of
the colleges, as evident in the above listing, to fix their annual operational
budget. It becomes imperative for institutions to come up with some solid
evidence to justify the funding to them, for the funding is not only based
on the number of students enrolled but also on the level of contribution
to regional development and its importance in attracting investment in the
region. And therein lies the importance of a study that analyses the impact
of the HEI on its locality and is a method that is frequently followed. There
are well established models of analysis for such a study.
Such a study acts a valuable asset for the university to highlight the role
it plays in the local economy and to maintain or to improve the profile and
3 National Institute of Technology
4 All India Institute of Medical Sciences and Research
5 Indian Institute of Science Education and Research
6 Indian Institute of Management

3
reputation of the institution.[7]
The current study is a humble take in this regard, considering the lim-
itations of time ( 8 weeks) and availability of all kinds of data required, to
analyse certain aspects of the economic impact of a multifaceted institution
that is IIST, on its locality.

1.3 Objective of the Study

The primary objective of the current study is to analyse and understand
whether the establishment of IIST in Valiyamala, Thiruvananthapuram has
brought about any improvements or developments in the economic state7
of the locality8 . We also try to identify the sectors in which the impact has
been highest.
The consideration is also on improvements in general societal welfare9
in a qualitative basis. This also allows us an understanding of the Trickle
Down10 theory in action. We also try to propose some ways in which the
7 In this study the impact of the college has been considered only from the demand side, as is described
in the coming sections
8 For considerations of societal welfare, our locality is limited to Ward no. 19 (Valiyamala Ward)
of the Nedumangad Municipality, Nedumangad Taluk, Thiruvananthapuram district. However, for some
of the quantitative assessments, Thiruvananthapuram district in general has been considered due to non-
availability of important data for lower divisions and as most of the key affected reside in the Thiruvanan-
thapuram city
9 Here, societal welfare has been considered to encompass aspects like road development, improved
transportation, increased scope of business and job opportunities
10 This is an economic theory/idea that proposes that providing economic benefits to those with upper-
level of incomes (in terms of providing tax relief etc to corporations, investors, entrepreuners etc) can
stimulate overall growth in the economy of the state and benefit society as a whole, through investment of

4
development of the society can be increased.
On a broader level, the study also depicts a picture of the contribution
that so many of the HEIs around the country are making to their regional
economy. This will be a reasonable understanding for most of the newer
HEIs which have been set up in tier-2 or tier-3 cities.
A secondary objective of the current study is to gain helpful first hand
experience in research and field study.

1.4 Plan of Study

The effects of an university on a region are multifaceted.According to Flo-
rax R. (1992)[6],the effects of a university can be seen in atleast eight sub-
systems as listed in figure 1.1. These subsystems are often closely inter-
linked.
The economic effects can be further distributed into the categories shown
in figure 1.2.
Effects on the economy can be broadly classified into two parts - the
demand side effects and the supply side effects. As shown in figure 1.3,
demand side effects are what the institute demands from the locality, de-
mand of material, labour, equipments, and what it pays in return (salary,
cost) goes to the economy. Demand from students also add to the effects
in terms of food, academic items, transport etc. This is the input for the
HEI. It is also rightly called as the Impact upon Expenses.
the extra wealth back into the economy, creating jobs and income for those with lower income.[19]

5
 Figure 1.1: Regional Effects of University.[6][7]

In contrast, supply side effect is the impact that university produces

after consuming the input in terms of the human resources, revenue to
the state generated by those human resources, technology output, patents
etc. Improvement in the lives of the workers in the university is a non-
measurable impact of the HEI. These are what the university supplies to
the ecconomy and rightly called Impact upon Knowledge.
In the initial years of a HEI, usually the impact upon expenses is higher
than the impact upon knowledge. As time goes by the impact upon knowl-
edge increases significantly and then becomes the prime focus[7]. Since
IIST is a relatively new institute (established in 2007 and the current cam-
pus started functioning in 2010), the current study focuses on the demand

6
Figure 1.2: Classification and Examples of Economic Effects of Universi-
ties. Source: Lambooy(1996) and modified by Pallenbarg(2005)[13][7]

Figure 1.3: Input and Output from an University. Source:

Stokes(1998)[10][7]

side effects of the institute and uses the expenditure models to estimate the
impact. The models of analysis are discussed in the next section.

7
1.5 Methodology of the Study
There are several established models of analysis in Literature and are dis-
cussed in detail in the next chapter. One of the most popular models is the
ACE model (or the Caffrey-Issacs Model[2]), which is very comprehen-
sive and as a result, very difficult to execute due to the amount of time and
data required. None of the consulted studies have done the full analysis
based on this model. Mostly one or two submodels is used.
There is a simplified model by Leslie and Lewis (2001)[8], which lists
out eight categories of impact. It is mostly based on the sub-models B-1
and I-1 of the ACE model.In the initial stages of the current study, this
model was taken as the basis. However, it was soon realised that a full
execution of this model was out of scope of the study. Moreover, both
these models are based on the American reality and do not fit the Indian
society in all spheres and some data is difficult to find here.
The current study is based on another model simplified from the ACE
model, as proposed by Fernandes(2013)[4]. That study is an expenditure
model. It considers the expenditure of students, faculty, staff, and institute
and visitors of each of them and produces the impact on the local econ-
omy using a regional multiplier. However, it is observed in that study that
the impact of students is more than 50 times greater than the other sources
(in 2012 the ratio of impact from faculty,staff,students and the institute re-
spectively is approximately 7:1:56:1). And this ratio is reasonable for most
colleges - expenditure by the institute in terms of constructional material,
lab equipments etc is mostly outside the immediate locality;expenditure by

8
the staff is low since their incomes are also generally lower;faculties have
higher purchasing power and expenditure is higher but the number of stu-
dents is huge in comparison and most of them spend extensively on food,
transport, daily use items etc, hence the highest expenditure comes from
students.
A similar pattern of expenditure is also expected in IIST, as the number
of students is around 8 times higher than the number of faculties (as of
2015). As such the current study only takes into consideration the expen-
diture from the students to quantify the economic impact of the university
on the locality. The estimation will not be complete but will be the most
significant part, under the reasonable assumption. This method has the
advantage of being very simple, involving data that can be collected peri-
odically at low cost. Thus the study can be conducted at different points of
time to observe changes.
Under this scheme, an online student survey was conducted to deter-
mine a comprehensive report of the expenditure patterns of the students of
IIST. This was then used to determine the net impact on the region using a
multiplier.
We also got certain data from the administration regarding the no. of
students, faculties and staff in IIST.
Besides that, the current study also analyses the ground reality of soci-
etal welfare in a qualitative way through two field surveys - one among the
staff and one among the local business houses. Questions were asked to
gain knowledege about their old occupation,old income, current income,

9
their view on development brought by IIST and any negativities associated
with the establishment of IIST. The results of this study are presented in a
later chapter.

1.6 Hypothesis
As stated earlier, the primary objective of this study is to understand and
analyse the economic impact of IIST on its locality. Thus, as a starting
point we hypothise that the the Establishment of IIST in the Valiya-
mala region has led to an overall upheaval in the local economy and
developmental indicators for the region.
The major developmental indicators considered are-

Education

Health care

Infrastructure (Mainly roads and buildings)

Business and trade opportunities

Electricity

Access to clean water

Access to various forms of communication

Our pilot studies tell that the setting up of IIST in this region has
brought about a big investment attraction in the region, despite the pres-

10
ence of earlier LPSC11 and has resulted in the creation of jobs of in varied
sectors like construction, housekeeping, food houses, stationary shops etc.
And we try to analyze the issue more deeply through the online survey and
the field survey.
Some of the inherent assumptions in our analysis are -

All people living in the locality and who are beneficiaries of the ex-
penditure of the students of IIST are assumed to invest the amount
gained within the locality itself.

Whatever is earned is invested and thus the money goes into the re-
gional economy, at least in the long run.

1.7 Possible Limitations of the Study

A university is a multifaceted organisation or institution. Its effects
are wide-ranging, both in terms of dimensions and sectors of influ-
ence. The current study only brings to analysis a very small part of it.
Therefor this is by no means, a full account of the impact, which is
huge. However the current study is an important starting point. No
such studies conducted within India have been found in the public
domain.

The proposed student expenditure model is in not a full account of

the economic impact of the institute. So, the actual economic impact
11 Liquid Propulsion Space Center

11
 will be higher.

One of the broader objectives of the current study is also to relate the
effects observed here to those in other HEIs in India. This will be
reasonable for the newer institutes. However,considering that some
of them are several decades old, their impact could be immense and
will be more on the supply side than the demand side. So the current
study will not be depict a good enough picture.

Every time that the analysis is characterized as being static (results

on a specific date) the conclusions reached about the economic im-
pact will only be valid for a short term; therefore, they cannot be used
to carry out long term predictions unless we assume that the func-
tional relations among the variables have not changed with time.[7]

12
Chapter 2

Literature Review
Considering the severe competition of economies around the world and
tight budgets within very unstable economic atmospheres, the financing of
HEIs is an important issue. And so is the importance of the analysis of the
impacts of the universities. As a result, there are several well established
models of analysis, each one of them not without loopholes and optimising
on other models to fit the environment of their country or state. We first
look at some of the common models for analysis available in the literature
and then review a few previously conducted studies based on those models.
This allows us an understanding of the models actually in action.

13
2.1 Common Models for Analysis

2.1.1 The ACE Model or Caffrey-Issacs Model

One of the most popular models is the model proposed by John Caffrey
and Herbert H. Issacs and presented in the American Council of Educa-
tion, USA (and so known as the ACE Model or the Caffrey-Issacs Model).
Fernandes (2013)[4] explains this model very explicitly as - This model
determines the impact upon local output or Gross Domestic Product (GDP)
and upon jobs created which would not otherwise exist, arising from the
HEIs presence and by the incomes earned and subsequently spent locally
by the HEIs individuals. The ACE model estimates the impacts upon lo-
cal business (sub models B-1,B-2, B-3 and B-4), local government (sub
models G-1, G-2, G-3, G-4 and G-5) and local individuals (sub models
I-1, I-2, and I-3) and four sources of direct impact are considered: the
institution, the faculty and staff, the students and the visitors. The data
required is mostly obtained from surveys, institutions records and other
official sources. A part of the economic impact can be measured using any
of the sub-models.
As seen in figure 2.1, the ACE model is very comprehensive, although
not exhaustive. As such, it is very difficult to execute fully due to require-
ment of huge amount of data and time. Most studies use the submodel B-1,
which deals with College Related Local Business Volume and the model
I-1, which deals with the Number of Local Jobs attribute to the presence
of the college. Nevertheless, it is one of the most popularly used mod-

14
 Figure 2.1: Economic Impact of a HEI based on the ACE Model.[7][2]

els and many studies have made simplifications to it or tried to optimize

certain aspects.

2.1.2 Simplified ACE Model by Leslie and Lewis

Based mostly on the submodel B-1 and I-1 [4], Leslie and Lewis (2001)[8]
proposed a simplification of the ACE method. These authors identified
eight categories, that are considered to represent the economic impact of
the university: 1) Number of local businesses related to the university; 2)
Jobs generated by the presence of the university; 3) Value of durable goods
produced by activities related to the university; 4) Value of the property
related to the activities of the university; 5) Increase of local Bank credits

15
due to University deposits; 6) Value of personal income; 7) Effects upon
Administration and taxes and 8) Number of businesses not created due to
the presence of the university.[7]
The method allows for a much faster estimation of the impact and thus
increases the usability for comparison studies. Also, there is evidence that
the first two categoried play the major role and so the analysis can be sim-
plified further.[4]

Figure 2.2: SubModel B1 of the ACE Model. The Monetary flow related
to the HEI that influences local business volume.[4][2]

16
2.1.3 Alternative to ACE Model by Fernandes,Cunha and
Oliviera

In their paper titled An alternative to the ACE model to determine Higher

Education Institutions economic impact:The case of the Polytechnic Insti-
tute of Bragana[4], the authors have proposed and applied a alternative to
the ACE model, that is much simpler and is easier to use and takes lesser
time, data and effort. [4]
This alternative also seeks to overcome a major criticism of the ACE
model- the fact that it considered all the expenditures as new to the region,
not distinguishing local residents from non-local residents, and it did not
consider the existence of an import substitution effect of the local students.
As marked in figure 2.3, this model clearly overcomes the limitation.
The authors also acknowledge the fact that another criticism of the
ACE model is that it does not consider the long-term effects. However,
since it is not possible to combine both the short term and long term ef-
fects in a single model, this alternate model also considers only the short
term effects. The current study is also based on a trimmed down version
of this model.

2.1.4 Ryan Short-Cut Model

This model, an adaptation of the ACE model, was proposed by G.J. Ryan
in 1981 and further refined in 1992. The model is specifically designed
with community colleges in mind, however it applies well enough to other

17
 Figure 2.3: Alternative to ACE Model proposed by Fernandes[4].

colleges in general and reduces the complexity of calculation by a great

margin.
In the paper Economic Impact Studies in Community Colleges: The
Short Cut Method. Resource Paper. Second Edition., the authors argue
that there are several problems for a exact application of the ACE model to
a community college. Firstly, several of the Caffrey and Isaacs economic
estimates are either inappropriate or less appropriate for use by community
college personnel. Second, the survey of faculty and staff is difficult to

18
adapt for a community college. Third, the retail gravity model presents
certain problems to the community college economic impact indicator. [9]
To overcome the above limitations, the paper proposes the Short-Cut
Model, which on availability of the supporting data, lists out a series of
simple instructions to estimate the economic impact. However, the model
demands a lot of secondary data-(1) total college expenditures; (2) percent-
age of college expenditures, as reported in # 1, spent in the county; (3) total
student activity expenditures; (4) total number of college employees; (5)
college employees who live in county; (6) total disposable income avail-
able to college employees; (7) total number of full-time students; (8) total
number of part-time students; (9) average annual college-related expen-
ditures by full-time students; (10) average annual college-related expendi-
tures by part-time students; (11) average annual non-housing expenditures;
(12) rental expenditures; (13) percentage who rent; and (14) total in-county
expenditures.[9]

2.2 The case of the University of Alcala, Alcala

de Henares, Madrid, Spain (Garrido & Gallo-
Rivera 2010)
Here, we look at the study conducuted by Ruben Garrido-Yserte and Mara
Teresa Gallo-Rivera at the University of Alcala, Alcala de Heneres, Madrid,
Spain and the report published asThe impact of the university upon local

19
economy: three methods to estimate demand-side effects [7] in the jour-
nal, The Annals of Regional Science by Springer in 2010.
The study understands the university as an income-expednditure flow
and focuses on the demand side effects, in line with the current study.
This paper focuses on the demand-side effects of the University of Alcal
(Madrid Spain) using three different methods: a) A simplified version of
the ACE Model; b) Estimating the Ryan Short Cut model and c) Using an
Input-Output technique taking into account the inside of I-O, a household
sector to estimate the induced effects. The main objective of this paper is
to show the advantages, limitations and scopes of each method. Finally,
we propose a way to distribute territorially these effects in the Community
of Madrid, using eleven intra-regional areas.
The study bases the reference year as 2005 and limits the territorial
scope within the Corredor del Henares. The study acknowldeges the fact
the effects of the university are very far reaching and broad. It mentions
places where the impact is supposed to be the greatest. The Corredor del
Henares is a unit of 50 Km 2 , and is comprised of a group of 28 munic-
ipalities that occupy an area of 1.179,06Km , with a population of more
than 500,000 inhabitants, and lineally situated between the two province
capitals: Madrid and Guadalajara (21 municipalities in Madrid and 7 in
Guadalajara). The region has an important business presence due to its
strategic location near the airport and because of good communication
through roadways and highways.
As mentioned earlier, this study draws a comparison between the es-

20
timates the economic impact produced by three different models - the
Leslie & Lewis Simplified ACE model, Ryan Short-Cut model and a Input-
Output techique.They obtain different values of economic impact parame-
ter through each of the models as stated - In terms of local expenditures,
the amounts would vary from 127.4 million euros (simplified ACE M.), to
217.2 million euros (Ryan Short Cut M.) and 227.4 millions (Input-Output
M.). In the case of generated jobs, the estimation is also different and re-
turns results of 3,640 jobs (Input-Output M.), 3.839 (Ryan Short Cut M.)
and 6,252 jobs (simplified ACE M.)[7]
They compared the multiplier of the cost obtained by the University of
Alcal with the one of American universities and mention their observations
as remarkable.In the case of the University of Alcal this interval varies
between 1,77 and 2,04 - according to the used method, whereas in the case
of American universities the average is greater and varies between 2,32
and 2,57[7]
They propose that one of the reasons behind this disparity could be
since the attraction effects for students outside the local community, of the
American University is higher, naturally the short term economic impact
is higher due to the commuting effect. This is true even for IIST-a huge
percentage of the students in IIST is from outside our territorial scope and
thus are expected to generate a significant economic impact that would not
otherwise be present.
The study accepts the results of the conservative simplified ACE model
as their main economic impact, one of the reasons for which being that

21
the estimate of the impact in terms of local expense has been carried out
in a direct manner and the use of multipliers that could underestimate or
overestimate the results has not been required[7].
The study finally concludes that the economic impacts generated by
the university of Alcala is seemingly significant for the locallity and thus
contributes to the growth of the local economy.The study maintains that
the results of the current study are mostly a conservative estimation and
can be surely improved by considering some more adequate estimations
of certain parameters that intervene in the models such as: the percentage
of local expenses carried out by the University, the local expense carried
out by other agents such as the Teaching and Research Staff and Services
and Administration Personnel, the expenditures of the local businesses to
local sources, the number of visitors to the University and their expenses,
and the local expenses carried out by individuals whose income is related
to the university but who dont work directly for it.[7]

2.3 The case of Polytechnic Institute of Braganca,

Portugal (Fernandes, 2013)
In their paper, An alternative to the A.C.E. model to determine higher ed-
ucation institutions economic impact the case of the Polytechnic Institute
of Braganca published in the journal Erasmus Universiteit Rotterdam
in 2013, authors Fernandes, Joana and Cunha, Jorge and Oliveira, Pedro
have proposed and applied a simplified alternative to the ACE Model. The

22
paper highlights few of the major criticisms of the ACE model and tries
to overcome some of those through a simple expenditure model, which
has already been explained in a previous section. The simplified method
is much more direct and also allows for direct comparison between the
results of different HEIs.
This study is based on data taken over two surveys in 2007 and 2012 at
the IPB. And the study demarcates the region of Braganca as its territorial
scope. As mentioned in the report, this is a region located in the northeast
of Portugal and is a very isolated and deprived area.The region is econom-
ically below national average, reaching only a GDP index of 70.0, with an
unemployment rate of almost 10%, a very low birth rate (7.4) and a very
high aging index (181.3)[4].
As such, this study is a really good glimpse at how much an university
can affect the dynamics of a region that is previously not very highly de-
veloped or strategically located. This is often true in the Indian scenario,
although it wouldnt be fully true in the case of IIST as one or two ISRO
centers are set up closeby and as such is a strategic location for develop-
ment.
Using the simplified model, the study estimates an impact of around
66,255,239 in 2012, considerably less than the close to 150 million euros
estimated in the previous case study. However the proportion in the re-
gional GDP is 11.02% and has in fact increased in the years from 2007 to
2012, which is even more spectacular considering that the national econ-
omy has been contracting due to the European econmic crisis in the recent

23
years.
It is also fitting that the impact in a isolated region is lesser than that in
a more strategic location as in the previous case study. The settlement of
business houses depends crucially on the location. This also shows that a
good region is equally important for the fluorishing of the institute as the
institute has on the region.
Due to the simplicity of its conduct, the authors suggest this study can
be conducted every year for comparison and also, data collection from
students will not be a big issue too, as these questiond can easily be part of
the usual feedback sessions they have.

2.4 IIT Impact Study, 2008

The IIT Impact Study, 2008[12] was conducted by a team headed by the
PanIIT Alumni India group.
The objectives for the study were to-

1. To take stock of contributions made by IIT Alumni over the last 50+
years across professions and geographies

2. To create a fact base for mobilizing the IITs and IIT Alumni; to
enable Government and IIT system to come up with policies and
allocate resources

They used an innovative methodology divided into two parts as-

24
Foot Prints

- This transformed into a web-based survey, with a focus to reach a max-

imum number of IIT Alumni Footprint refers to the visible leave behind
from the professional involvement of a broad cross-section of IIT Alumni

We measured this through self reports by a web-based survey

Quantitative responses got captured from a sample set

Responses were extrapolated on quantitative parameters to get the

impact of IIT Alumni

Finger Prints

- This transformed into a series of interviews, with a focus to get qualitative

insights from some of the high performers

Fingerprint refers to the touch and feel of the professional lives of a

few select IIT Alumni

Detailed interviews were conducted with Eminent IITians

We also conducted an analysis of ET 500 companies

Life story of these alumni were analyzed in details to understand the

impact of IIT Alumni

While this study is a very broader level of economic impact study than
the current study, it is worthwhile to understand the impacts. Moreover, it

25
is also related to the broader objective of the current study that of relating
the results at the national level.
The executive summary is presented here-

Executive Summary
The IIT Alumni Impact Study 2008 is an unprecedented effort launched
by PanIIT in partnership with the India Brand Equity Fund, with the re-
search assistance of Zinnov Management Consulting, and sponsorship from
Vodafone.
Its goals are to take stock of contributions made by alumni of the Indian
Institutes of Technology (IIT) over the last 50+ years across professions
and across geographies, and to create a fact-base for mobilizing the IIT
alumni to dialogue on how to do even more, individually and collectively.
An important part of this exploratory study was a global web-based
survey that attempted to map the impact of IIT alumni on the global econ-
omy across impact areas like entrepreneurship, scientific and technological
achievement, as well as social transformation, research, educational contri-
butions and leadership. The survey was launched on September 22, 2008.
Over 4500 IIT alumni participated in this study. This report highlights
some of the key findings.
Since the first batch of graduates from IIT Kharagpur in 1955, the IIT
Alumni population from the 7 campuses has now reached nearly 175,000,
with an increasing percentage from lower economic backgrounds and smaller

26
cities. Two of every three graduates from IIT pursue additional education
post-IIT, with a majority seeking technical degrees. When they join the
workforce, one in four IIT alumni starts off with a role in research and
education. Two out of three start in either engineering or services roles,
with an increasing number choosing services including IT/ITeS and con-
sulting. Roughly 3% of IIT graduates start their first jobs as entrepreneurs,
with a similar number choosing social roles such as government, social
work or politics. As their careers progress, roughly a third of IIT alumni
stay in the same field they started out, with education & research, social
roles, and services showing the greatest stickiness. At the present time, a
third of IIT alumni are in non-industry roles, with roughly another third
in small-medium sized businesses/startups, and another third working for
companies with revenues over $100 million (INR 450 crores).
An important dimension of the footprint of any population is its eco-
nomic impact. IIT alumni working across the world are now in profes-
sional roles with significant financial influence. The study reveals that IIT
alumni in top-leadership roles currently have a combined annual revenue
responsibility of around USD 1 1.1 Trillion for the year 20072008. Ad-
justed for PPP, alumni in India account for 78 per cent of this number.
Over the last 50 years, the companies IIT alumni have worked for have
generated 15 19 million jobs, with three-quarters of these jobs being in
India.
Another important indicator of the contribution of a population is its
relevance to, and degree of engagement with social transformation. Cur-

27
rently around 14000 IIT alumni are in roles with government, politics or
social work. Nearly 4000 alumni have founded social bodies in areas such
as education, environment, anti-poverty, child and womens welfare, social
planning, medical services, and infrastructure. In recognition of their rel-
evance, one in four of these social bodies have received funding in excess
of USD 1 million. Apart from those who are directly in social roles,nearly
50% of IIT alumni in senior industry positions indicate they are involved
in CSR activities.
A commonly used indicator of success is the level of entrepreneurial
activity in a population. Currently, 11 per cent of IIT alumni are in en-
trepreneurial roles with 41per cent having founded more than one com-
pany. Two-thirds of the companies started by IIT alumni are in India, and
in a remarkable testimonial to the success of Indias economic liberaliza-
tion efforts, 80 per cent of them have been started post 1990. A majority
of companies founded by IIT alumni were started with little or no funding,
are in the technology domain, and cumulatively IITian founded startups
today generate around $171 billion in annual revenues.
The central theme of Pandit Jawaharlal Nehrus vision which drove the
creation of the IITs was the establishment of educational institutions that
would spur excellence in science and technology. The study findings in-
dicate significant achievement of IIT alumni in these arenas. Today, 17
per cent of the alumni are in research and education roles with as much
as 9 in 10 of these working on technology-related topics. Nearly 80% of
those engaged in research are in Tier-1 research institutions, and 15% of

28
IIT alumni in research and education have at least 1 patent to their credit.
Alumni have authored a large body of influential scholarly publications,
and serve extensively on doctoral research committees. Four in ten have
been recognized with national or international awards.
The ultimate measure that indicates not just past success, but potential
for future impact of any population is the extent to which its members are
involved in leadership roles. Leaders have the opportunity to set direction
and make changes happen. The study shows that 43% of senior IIT alumni
(those graduating before 2002) are in top-leadership with 6 out of 10 of
these being leaders in industry roles, 3 out of 10 being leaders in research
& education institutions, with the rest being leaders in social roles. Of
these leaders, a majority are based in India today, with almost half having
returned from being abroad at some point in their careers. As concrete evi-
dence of the extent to which IIT alumni are involved with Indias economic
growth story, the study shows that 54 per cent of the largest 500 Indian
companies have IIT Alumni on their board. In addition, a third of the
alumni who are in top-leadership roles in industry also hold positions of
significant policy making influence on industry bodies. On a global scale,
of IIT alumni who are in top-leadership roles in research over 80% head
Tier-1 research institutions, and over 60% of those in top-leadership in ed-
ucation are associated with Top 20 departments. Over 5000 IIT alumni
lead social bodies around the world.
The rest of this report presents more detail on the findings highlighted
above and a few additional details. In reading through these findings, the

29
reader would be well served to bear in mind the goals of the study, and the
exploratory nature of the research design. These are directional insights
and not intended to be taken as scientifically proven facts. And perhaps
most importantly, because there is no known other point of reference, these
insights are not intended to be used to compare the contribution of IIT
alumni with any other population. They are simply intended to enlighten
IIT alumni and the IITs with a view to looking at what more can be done.
[12]

2.5 A Note on Measuring the Impact of an HEI

(Brown and Heaney 1997)
This paper by Brown and Heaney is an undertaking on the study of the
methodologies of the Economic Impact Studies itself.
Universities often justify their funding from states in terms of the eco-
nomic impact they have on the state or the return of investment. Most
universities in the past have used a economic base approach measuring the
demand side effects. Recent studies have employed a new methodology
considering the states skill base as part of the economic impact. This is
the supply side impact under consideration. The revenue that the graduat-
ing students pay to the state has been taken is taken into consideration here
under present value terms. However, the authors of this paper argue that
this method leads to a very exagerated view of the impact of the HEI. It
overestimates the impact by a huge margin from that of the economic base

30
method. This is mostly since it does not take into account the migration
effects and assumes that all those who graduate from the HEI stays in the
state and pays tax to the state, however this is mostly not the case as after
graduation, the probability of students migrating actually increases. More-
over, the author cautions the states not to see HEIs primarily as a revenue
base and decide its financing, but to take into account the other benefits
that the HEIs impart to the society. [1]
The paper states that to understand the economic impact, The task of
the researcher is to ask the hypothetical questions: What would happen
if the university did not exist? How many fewer jobs and how much less
income would be present in the region?
The paper refers to Elliott, Levin, and Meisel (1988)[3] and talks about
a six step procedure that can be used to compute the economic impact as
shown in figure 2.4.
The newer skill based approach consists of three more steps-First,
estimate the net income received by all graduates of the university (who
remain in the state after graduation) in excess of what they would have
earned without a university education. This figure was computed by taking
the difference be- tween the earnings of college and noncollege graduates.
Second, compute the discounted present value of the sum computed in the
previous step. Bluestone argues that this amount is an economic impact
on the state uniquely attributable to the university. Third, estimate the tax
revenue generated from the increase and subtract the state subsidy on ed-
ucation. This amount is considered a return on the states investment in a

31
 Figure 2.4: Economic Base Approach.[3].

university.[3]
The major shortcoming of the newer approach is that it fails to con-

32
sider the migration effects. The approach is based on the assumption that
after graduation, the students stay in their own state. However, it is a com-
mon phenomenon that after migration, the chances of migration actually
increase. Moreover, migration decisions are based on employment oppor-
tunities; if there are not enough job opportunities in the concerned sectors,
migration is bound to happen.
The paper concludes on the understanding that economic impact stud-
ies are indeed important; however for it to be used effectively, it must be
used with a methodical rigour so that the study is considered credible ev-
idence. The study recommends the use of a model similar to the one pro-
posed by Elliott, Levin, and Meisel[3] and avoid using the skill-base or
other ad hoc approaches[1]. The study states that there is an inherent moral
hazard in these kind of studies since those who usually conduct the study
stand to benefit from the increase in funding to universities, but for this
tool to be useful in the long run, every effort must be made to conduct the
study in a accurate way, rather than producing biased results. The study
maintains that although skill based approach is not to be considered in the
impact analysis, their contribution to the society is important and should
indeed be part of the debate over the funding of institutions. Education
is a gift from one generation to the next; it is a social function of the high-
est importance. Perhaps economists and other researchers should focus
on emphasizing these justifica- tions for spending, rather than economic
impact. [1]

33
2.6 Considerations for the Current Study
Having reviewed two studies (Fernandes 2013 and Garrido 2010) on the
same subject and also a broader level study considering a large scale impact
of the IITs (IIT Impact Study 2008), we now have a sufficient understand-
ing of the subject in concern and it has also allowed us an understanding of
the possibilities and limitations of our study at a greater depth. This also
comes in the backdrop of the other document we have reviewed by Brown
and Heaney (1997) which cautions us against overestimating the impacts
of an institution and thus wrongly glorifying it.
We should also understand the differences between the mentioned stud-
ies (Fernandes 2013 and Garrido 2010) and the current study. The study by
Garrido is a higly elaborate study computing the economic impact based
on three models and drawing a comparison. On the other hand, Fernan-
des has used a simplifed model, which is predicts results close to the ACE
model and is also more efficient.The current study is based on the sim-
plified model by Fernandes, with a further simplification of considering
only the student expenditure. However, the current study goes beyond just
computing a number to represent the impact, it also presents a qualitative
analysis of the actual welfare situation in the locality by way of talking to
the local residents and some members of the staff. The current study there-
fore looks at the ground realities of the development in the society in terms
of a few developmental indicators and try to understand what contribution
IIST has made to the welfare of its immediate society.

34
Chapter 3

The Surroundings of IIST

The study focused on Economic Impact of IIST. Any universitys influence
is due not only to the location of the teaching centers of the University but
to the origin of the students and the teaching administrative and services
personnel that form part of the university community and the important
business volume carried out by the companies established in the area. [7]
Also we can notice that the students of IIST are from various parts of coun-
try. The teaching staff also include the same.Most of the cleaning staff and
the mess workers are from the surrounding places of the university indicat-
ing employment generation. In this sense, we next present some indicators
that allow contextualizing the local surroundings in which the University
exercises its immediate influence.

The campus is located at Valiyamala road, Valiyamala, Thiruvanantha-

puram, Kerala at a distance of nearly 30kms from trivandrum city.

35
 Kerala has an overall population of 3.34 crores, with sex ratio of 1084
females per thousand males. Literacy rate is 9.6 percent among males
and 92 among females. 48 percent of population live in urban areas. The
decadal population growth has been 4.9 percent. Population in rural de-
clined area by 26 percent and in urban area increased by 93 percent.GSDP
of state for 2013-14 is estimated at Rs 3.5 lakh crores. Service sector con-
tributes to 60 percent of economy, manufacturing sector 25 percent and
agriculture sector 15 percent. This shows increasing rate of urbanization
and shrinking of rural population. Population density is 860 per sq km as
against 382 per sq km of India.

Trivandrum district is densely populated with population of 33 lakhs

with 54 percent urban population. The decadal population growth is 2
percent with urban population growing by 62 percent and rural popula-
tion decreasing by 29 percent. Sex ratio is 1087 females for every 1000
males. The population density is 1506 persons per sqkm.[14] There are 12
Community Development Blocks and 78 Panchayats in the District. The
Taluk-wise distribution of Villages, Towns, CD Blocks and Panchayats[15]
are given in the figure 3.1

In the following table some figures about the state Kerala and Thiru-
vananthapuram district are registered to allow a better understanding of the

36
Figure 3.1: Fig showing Distribution of Villages, Towns, Development
Blocks and Panchayats.

regional context.

Indicators Kerala Thiruvananthapuram

Population 34.8m 74498
Population Density per sq.km 860 1502
Unemployment rate 9.90 52.3(2003)educated
Illiteracy rate in percent 15.72 7(2011)

Table 3.1: Some of the Regional indicators

Through this table it is possible to verify that Kerala has witnessed lowest
population growth and has the highest literacy rate and highest sex ratio in

37
the country.The region is with less illiteracy and with an educated unem-
ployment rate of almost (10) which can taken into account for providing
better job oppurtunities.

Academic year Students Faculty

2007-2008 138 25
2008-2008 148 30
2009-2010 151 42
2010-2011 148 56
2011-2012 140 65
2012-2013 138 73
2013-2014 158 85
2014-2015 153 86
2015-2016 138 83

Table 3.2: Number of students and faculty worked in corresponding Aca-

demic year

Regarding the institution, it takes only a fixed number of students annu-

ally. It started with 25 faculty in the academic year of 2007/08 and reached
83 in 2015/16.Its growth over the years can be assessed by the increase
in the number of students enrolled during the admissions and also the in-
crease in the number of faculty members.

38
Chapter 4

Data Collection Methods

The current study is conducted in two parts - one is the quantitative study
based on student expenditure and the other is the qualitative analysis of the
state of societal welfare in IISTs immediate locality. The data collection
was done primarily using surveying methods.1

4.1 Online Survey

An online survey was conducted to get data about the expenditure of stu-
dents. The survey was taken by a healthy number of around 200 students
(approximately one-fourth of the total student population of IIST). Individ-
ual screening of students were also done in certain cases. The focus of the
survey was to get the net value of expenditure of students within our terri-
tory, as this is the net flow of money that is going out of IIST from students
and is a significant portion of the impact on the local economy. So, people
1A general examination or a description to question an individual or a group to find their opinions.

39
were asked to approximately give the values of their weekly/monthly/trip
wise expenditures in sectors like Food, Transport, Academic items, per-
sonal care items, clothing, expenses by their visitors etc. Also,in each case
the exact place of money outflow was asked. This has allowed us to anal-
yse the depth of impact in different sectors and identify the major ones.
The analysis of this results of this survey is presented in the next chapter.
A sample specimen of the survey questionnaire is included in Appendix
A. It is worth mention here that a very small number of the entries in the
survey were made by some subjects who did not fully realise the gravity
of this analysis and had submitted arbitrary and contradicting responses.
These have been discarded due to lack of credibility as it could affect the
analysis of our study.
The data obtained from this survey was extrapolated for all the students
of IIST using the method of averages, and presents a fairly good estimate
of the impact in monetary terms.

4.2 Field Survey

This part is for analysing the ground realities of the impacts on societal
welfare that IIST has had on the society. The survey was done in two
parts - one among the working staff and the other for some of the local
residents, mostly the shopkeepers involved in business activity. We asked
questions regarding their views on the impact that IIST has had on their
lives or the society. The changes that they have observed happening after

40
establishment of IIST or if there has been any adverse impact due to the
presence of IIST. We also asked the people about their previous occupa-
tions and work conditions and tried to understand the improvements in life
style. The analysis of the data from this chapter is presented in chapter 6.
Specimen copies of the survey questionnaire asked in to the shopkeepers
and the staff is included in the appendix B and C respectively.

4.3 Secondary Data

We have also used some secondary data, like the number of students cur-
rently in IIST, the number of permanent staff, their salary etc. The admin-
istration of IIST has been very kind enough to help us in obtaining this
data. The data on the number of students allowed us to calculate the net
expenditure from the students of IIST by extrapolating the data from our
sample space.
Numerous other small pieces of data like the data about Thiruvanantha-
puram district, were obtained from various sources in the public domain,
which have been cited in the bibliography. These have helped in gaining
an initial understanding of the region around IIST.

41
Chapter 5

Observations and Analysis:

Quantitative Study based
on Student Expenditure
In the current section, we analyse the data obtained from the online student
expenditure survey. The data obtained is first analysed seperately in differ-
ent sectors like food, transport, clothing, etc. Relevant graphs are plotted
for each category. Finally we apply the economic impact model to obtain
the net impact.
All the expenditure data presented here is in rupees and is extrapolated
for a year (approximately 9 months, considering negligent amount during
the vacations of 3 months).

42
5.1 Distribution of survey samples
The data available were sampled on the based on the sex and program.
The pie chart below shows the sex ratio distribution of survey samples.

Hence, the survey samples are collected from 29% female students and
71% male students.
The pie chart below shows the year and program wise distribution of the
sample surveyed.

43
From the pie chart above it is evident that highest number of entries came
from the B.Tech second year group.

44
5.2 Variations in Expenditures

5.2.1 Expenditures in Food

According to the graph above most of the food expenditure goes to Ne-
dumangadu and Trivandrum. The hotels nearby gain less as compared to
those in the city.

45
5.2.2 Expenditure on Transport

The pie chart above shows the expenditure on transport for two purposes.Either
going for shopping or some necessary purposes or only for sightseeing.
The general expenditure is higher, although the amount on sightseeing is
very comparable too.

46
5.2.3 Expenditure on clothings

The graph above depicts the expenditures on Laundry for washing

clothes and also for buying of new clothes and shoes etc. The amount
spent in shopping is quiet significant. Though the expenditure in shopping
is not regular ,still the amount associated on each trip is larger which makes
the total expenditure very much significant. The amount spent on laundry
is significantly lower. This is due to the fact that most of the laundry nowa-
days gets done in washing machines. Girls hostels have it and also Ardra
hostel has it.

47
5.2.4 Expenditure on stationary items

The stationary expenditure graph was plotted for the shop inside iist cam-
pus and for the shops outside the campus. The amount spent outside is
larger than that inside the campus.

48
5.2.5 Body care

The above graph is for the personal expenditure on body care eg. For get-
ting hair cuts and also for daily use items. The expenditure on hair cut
mostly goes to the nearby saloons in ISRO junction. While the other stuffs
are bought from inside the campus, in nearby shops and also to Neduman-
gadu and Trivandrum city.

49
5.2.6 Visitors Expenditure

Visitors expenditure came out to be a major contribution to the local econ-

omy. The graph above depicts the various sectors in which the expenditure
is going. It is again not a very frequent spending but amount carried is
heavy which makes it overall a big source of capital in the neighborhood.

50
5.2.7 Major one time expenses

A study of a few major items which are generally bought once by the stu-
dents during their course. This mainly includes the expenditure on mat-
tresses and umbrellas. Other items like bucket , bed-sheet have not been
considered because of their low prices compared to these two.

5.3 Overall Estimation

5.3.1 Program wise Comparison

We also plotted a graph above showing the average expenditures course

and year-wise. It shows that the senior most students in Mtech. and Phd.
spent more than students from other programs and the their large number
also is also responsible for their huge figures. . Among the B.Tech students

51
, the 3rd year students expenditure is higher than the others.

5.3.2 Total expenditures

The following table below shows the total expenditure of the students in
the local economy in various major sectors. And also the estimated total
expenditure was calculated which was Rs. 5,03,64,157 per year.

52
From the table above it is evident that the contribution of food items in the
local economy is 66% , which is significantly higher than all of other sec-
tors.The pie chart below shows the percentages of different sectors.

53
 Hence, according to the simple student expenditure model we followed,
we find that the net economic impact of IIST on its neighbourhood is
around 5.03 crores of rupees (INR 5,03,64,157). This is 0.01% GDP of
the Thiruvananthapuram district.Although this might seem an insignificant
amount in the grand scheme of things, the impact on a smaller territory like
the Nedumangad municipality will be considerably higher. However, due
to non-availability of data, an appropriate comparison is not presentable in
the current study.

54
Chapter 6

Qualitative Study: Based

on Field Survey
In the previous chapter, focus was given on the economic impacts of IIST.
A detailed discussion on how the economy of the region is affected by IIST
was carried out to throw some light on the effects that IIST as a higher
educational institution (HEI) would have on the neighbourhood. However,
it is quite evident that a study of the economy of the region is in itself
not sufficient to bring out the finer details of growth and development in
the locality. In this regard, apart from the quantitative analysis that was
carried out earlier, it becomes extremely important that a qualitative study
also be carried out. The main reason for this is the fact that a qualitative
study would help our understanding on matters of societal importance. The
impacts of IIST on the welfare of the society are the main focus of this
section.

55
 To understand the ground reality, field surveys were conducted. The
main targets of the survey were the shopkeepers and businessmen in and
around the locality. Further surveys were conducted among the staff of
IIST, since the staffs are an integral part of the institution. Generally, it
is seen that staff members act as the bridge between the institution and
its surrounding. Also, the opinions of the general public in the neigh-
bourhood on the impacts of IIST were collected as a qualitative data, as
that would clearly reflect the advantages and disadvantages that IIST has
brought about. With the help of all these data, we have tried to qualitatively
understand and reason out the impacts that IIST has made on the locality.
It should be noted that stress has been given to the developmental aspects
of the society.
Developments always result in higher quality of life for a community.
Development as such is a broad term and encompasses various aspects of
the society, all of which cannot be brought under the consideration of this
study. However, focus has been given to few social indicators that are
expected to reflect the changes that happen in the society clearly without
any ambiguity.
The main social indicators that were used are:

Education

Health care

Infrastructure (Mainly roads and buildings)

Business and trade opportunities

56
 Electricity

Access to clean water

Access to various forms of communication

With the help of these social indicators, a qualitative study on the wel-
fare of the society was carried out. Opinions of several people in the local-
ity were collected to substantiate the findings.
We quote here, what the people in the region of consideration had to
say about the following questions.

1. Could you comment upon the development IIST has

brought about in the locality (Development in the broad
sense includes roads, electricity, transport, health, ed-
ucation etc.)?

# According to me, IIST hasnt brought enough or the expected

development to the locality. The road was constructed prop-
erly, after setting up of IIST. The role that students in IIST play
to educate the youth through initiatives like Nirmaan is highly
commendable.

# The present condition of road can be attributed to IIST. The

transformation from the old one lane path to the present tarred
two lane road is one of the developments that IIST had a huge
role to play in. Although access to water is still a daunting
problem, IIST hasnt been able to do anything in that direction.

57
 Health care is another cause of worry. But, IIST has been a
huge boost to the development of locality in numerous ways.

# The roads have certainly become better. Also, in my opinion,

the standard of living of individuals in the locality has gone up,
courtesy of IIST. We now have greater range of goods available
to us, because of the new shops that have come up after the
formation of IIST. Trade and business has bloomed since the
arrival of IIST. IIST has also helped in employment generation
which is really necessary for the development and growth of
the region.

# It has been wonderful. IIST has brought rapid growth in the

region. After beginning of IIST in 2010, the business has re-
ally prospered, especially during the time were IIST was being
setup.

# The roads are a classic example. I being an Auto rickshaw

driver personally have experienced the hardships one faces when
roads are in bad condition. All that is changed now. Transporta-
tion has certainly become easier. Of all people, I think I can
judge this the best. But I believe IIST could help the locality
by creating more employment opportunities. On the brighter
side, if we compare the situation of this region before and after
the setting up of IIST, remarkable changes have happened after
this institution started although LPSC used to function.

# Before IIST, the roads were the municipality roads, not the

58
 luxurious ones that we have now. That in itself is a tremen-
dous change, I feel. I believe that the Nirmaan Programme
is a great initiative. I personally feel that people in the local-
ity dont have the educational backgrounds to help their chil-
dren out with their studies. Again, they dont have the financial
background to arrange for alternative tuition. In this scenario,
the Nirmaan programme is a great helping hand to the students
from various walks of life to excel in their studies. Educating
the youth is the right way to go forward. For me, that is devel-
opment. Apart from that, IIST has attracted lot of business and
trade which is quite good for the general public also since it
helps in reducing the distance the people have to travel to meet
their demands and basic amenities. Employment generation in
the form of mess and construction workers is good.

2. Could you compare your business before and after the

setting up of IIST (Note: Applicable if DoE is after
establishment of IIST, Valiyamala Campus)?

# At first, the business was bad. Then, after the setting up of

LPSC, the situation became better. IIST has definitely affected
the business in a good manner. After IIST was setup, business
was extended to more hours to serve the needs of the students,
who form a large population of the consumers.

# IIST has definitely helped the business, which of course is

59
 expected since more people especially students come, which
naturally leads to more business.

# The business is quite different. It has turned for the better.

# It has been wonderful. IIST has brought rapid growth in the

region. After beginning of IIST in 2010, the business has re-
ally prospered, especially during the time were IIST was being
setup.

3. How does IIST affect your day to day life? Do you

think it has played an active role in employment gen-
eration in this locality?

# IIST has a affected the life of each and every person in this
locality positively. IIST is good for the common public as well
as businessmen. According to me, setting up an institute is
always a good thing, since that will bring a lot of good changes
in that locality. Government should focus on such initiatives as
this will lead to betterment of the living standards of the people.

# The business has certainly turned for the better. We get more
customers, which is always a good thing. However, employ-
ment generation has not happened to the level that was ex-
pected. To my knowledge, only a few mess workers and clean-
ing staff members are really members of this locality. However,
the change is for the good.

60
 # Not to the expected level. Still, considering the fact that in-
stitute has come into the lives of the people for a very short
time of 4 years, the trend of development has been remarkable.
Employment generation can be made better by involving more
people from the neighbourhood. The impact that IIST has had
on me and my family is truly great.

4. Is there any negative effect due to this higher educa-

tion institution? Do you feel that it is impacting your
life adversely?

# Not really.

# Nothing.

# No. Till now, IIST has not affected our lives adversely.

# Drainage from IIST during rainy season is causing problems

to the people living behind. Drainage passes through several
peoples houses and leads to mosquito infestation and spreading
of several diseases.

During the course of the survey, questions on several other social in-
dicators were posed. Many of them however failed to reflect the changes
that has happened to the society and hence is not worthy to be mentioned,
and thus has been neglected.
From all these qualitative data, the conclusion that can be drawn up
is the fact that IIST has had a pivotal role to play in bringing growth and

61
development to the locality. It acted as a catalyst for driving the develop-
ment process forward. Participation from the general public has resulted
in extracting the maximum results.

62
Chapter 7

Conclusion
At the start of the study, based on the findings of our pilot surveys, we had
made an initial hypothesis that the Establishment of IIST in the Valiya-
mala region has led to an overall upheaval in the local economy and devel-
opmental indicators for the region. As we now have analysed the situation
at a much greater depth using both quantitative and qualitative methods,
we are in a situation to comment on the validity of the hypothesis and to
describe it in much greater detail.
We have found that the hypothesis is indeed true for most of the cases.
According to our simple expenditure model of analysis, we have found that
the net impact of IIST (significantly the student population) is around 5.03
crores of India Rupees annually1 . Considering the GDP of Thiruvanantha-
puram in 2012-2013, approximately 38,000 crores of Indian rupees, this is
a meagre amount. However, we must understand that the institute is rela-
1 Here annually refers to a period of 9 months, under the assumption that the impact is negligible during
the 3 month vacation period

63
tively new and also the impact in a more immediate territory like the Nedu-
mangad municipality will be much higher. But due to the non-availability
of data, the comparison is not being presented here.
However, considering that the annual budget of IIST for the year 2015-
2016 is around 150 crores of rupees[11], the net impact is a significant
3.33% of that budget. That is for the huge annual investment that the cen-
tral government makes on IIST, there is a significant return value of 3.33%
within the immediate territory. And this is a very conservative estimation
of the demand side effects taking into account only the student expendi-
ture data. The gross impact from all the factors can be significantly higher
than this. And for an institute that is hardly 8 years old, this is a pretty
promising statistic.
Our ideas are further substantiated by the qualitative study that we
conducted and took the views of the local people. Most of them share
a promising idea about the development that IIST has brought about.
As andecdoted by one of them- We now have greater range of goods
available to us, because of the new shops that have come up after the forma-
tion of IIST. Trade and business has bloomed since the arrival of IIST. IIST
has also helped in employment generation which is really necessary for the
development and growth of the region., the growth in trade and business
has been really good. This is understandable considering the huge young
population that the institute hosts, with a myriad of demands in different
sectors. As we observed the quantitative analysis, expenditure on food is a
whopping 3.31 crores of rupees (66% of the net impact).As such most of

64
the hotels nearby have fluorished greatly as they provide the students with
a break from the usual mess food.
One of the autorickshaw drivers proudly mentions how the transport
sector has greatly improved. On the issue of development due to IIST,
this is what he said - The roads are a classic example. I being an Auto
rickshaw driver personally have experienced the hardships one faces when
roads are in bad condition. All that is changed now. Transportation has
certainly become easier. The roads were earlier very narrow and not fully
metalled. Advent of IIST has changed this due to the heavy demand by
the staff and students and has resulted increased transportation access to
the region. Another one had to say this - Before IIST, the roads were the
municipality roads, not the luxurious ones that we have now. That in itself
is a tremendous change, I feel.
However, all is not as flowery as these sectors. There havent been any
significant improvements in the health care system (although 24/7 access
to healthcare is available for people inside the campus), or the water supply
problem. Many of the people have also complained about IIST not gener-
ating or opening up enough employment opportunities to the local people.
They say that most of the workers, especially in the skilled employment
sector are from outside the immediate neighbourhood and it would be good
idea to increase the reperesntation of the local people in these jobs. Local
people have had highest employment in the construction sector,as said by
one of the local residents.
Although there has not been any big improvement in the education

65
sector, many of the interviewed have commended the actions of the Nir-
maan Initiative being undertaken by the students of IIST with the facilities
being provided by the college administration.I believe that the Nirmaan
Programme is a great initiative. I personally feel that people in the local-
ity dont have the educational backgrounds to help their children out with
their studies. Again, they dont have the financial background to arrange
for alternative tuition. In this scenario,the Nirmaan programme is a great
helping hand to the students from various walks of life to excel in their
studies. Educating the youth is the right way to go forward. For me, that
is development-this is what one of them had to say about the initiative.
Through this study, we would like to congratulate all those involved in this
initiative for their tremendous and beautiful work, and would also like to
thank them for making a social impact of IIST on its neighbourhood.
Thus, it is evident that develoment has indeed taken place in many
spheres of the society due to the presence of IIST, although the develop-
ment is lagging behind in several spheres. Opening up job opportunities
for more local emplyment would have a really good impact. However we
as well as most of the local residents feel that the growth has been pretty
promising and the impact is expected to make more strides in the future.

66
Appendices

67
Appendix A

Student Expenditure
Survey Questionnaire
1.Getting to know You!
a.Year of Study?*
A.1st year Btech
B.2nd year Btech
C.3rd year Btech
D.4th year Btech
E.Mtech/Ph.D

b.Gender*
A.Male
B.Female
C.Other

68
2.Life runs on food! Of course it had to come first! How much do you
spend on an average in a week in each of the following places.
a.Cafeteria + Juice shop*
A.0
B.Around 100
C.Around 200
D.Around 350
E.Around 500 or More
b.D4 and D2 Canteen*
A.0
B.Around 30
C.Around 50
D.Around 80
E.100 or More
c.Nearby Shops*
A.0
B.<100
C.100-300
D.300-500
E.500+
d.Nearby Hotels*
A.0
B.Around 50
C.Around 100

69
 D.around 150
E.around 200
F.>200
e.Nedumangad or City*
A.0
B.Around 300
C.Around 500
D.around 700
E.>1000
f.On Sightseeing Trips near Thiruvananthapuram?*
A.0
B.Around 300
C.Around 500
D.around 700
E.>700
3.Transport Costs
a.How frequently do you go to city or Nedumangad for shopping, movie,
food etc?*
A.Once a week
B.Twice a week
C.More than twice a week
D.Once in two week
E.Each week
E.Very rare

70
 b.How much do you spend in terms of transport (all inclusive) in each
city trip on an average?*
A.Around 50
B.Around 100
C.Around 150
D.around 200
E.N/A
c.How frequently do you go for other sightseeing trips nearby Thiru-
vanathapuram?*
A.once a semester
B.Twice a sem
C.3-5 times a sem
D.once a year
E.very rare
d.How much do you spend on an average in each trip for transport?*
A.Around 100
B.Around 200
C.Around 300
D.> 300
E.N/A
4.Wardrobe Expenses
a.How often do u go for shopping of clothes, shoes, sandals etc in Trivan-
drum?*
A.once a semester

71
 B.Twice a sem
C.3-5 times a sem
D.once a year
E.never
b.How much do you spend on an average on such a trip? ( in terms of
actual items bought)*
A.Around 500
B.Around 1000
C.Around 1500
D.Around 2000
D.> 2000
E.N/A
c.How often do you give your clothes for laundry?*
A.once a month
B.Twice a month
D.once a week
E.never
d.Average Laundry Cost (inclusive of all items in a single visit)?*
A.<50
B.50-100
C.100-150
D.150+
E.N/A
5.Academic Expenses

72
How much do you spend on an average in a month on buying pens, note-
books, books, graph sheets etc from these places? Exclude online expenses
on Books
a.From Cafeteria?*
A.<30
B.30-50
C.50-100
D.100+
b.From City or Nedumangad?*
A.<50
B.50-100
C.100-200
D.200+
D.0
6.Personal Expenses
How much do you spend on being picture ready?
a.How often do you visit a hair cutting shop/parlour?*
A.once a semester
B.once in month
C.once two months
D.never
b.Average Expenses*
A.<100
B.100-200

73
 C.200-500
D.500-1000
E.>1000
F.N/A c.How much do you spend on an average in a month on body
care items like deos, soaps, shampoos, oil, creams etc ?*
A.around 100
B.around 200
C.around 300
D.around 400
E.>500
7.Visitor Expenses
a.How often do you have visitors on an average?*
A.once a semester
B.twice a semester or more
C.once a year
D.never
b.How much is spent by you and your visitors on transport only within
the district?*
A.<1000
B.1000-2000
C.2000-3500
D.3500-5000
E.>5000
F.N/A

74
c.Food?*
A.<500
B.500-1000
C.1000-2000
D.2000-3500
E.3500-5000
F.N/A
d.Hotels with food and lodging?*
A.<2000
B.2000-4000
C.4000-6000
D.6000+
E.N/A
e.Other Costs*
A.<2000
B.2000-4000
C.4000-6000
D.6000+
E.N/A 8.One Time investments a.Have you bought a mattress?*
Y.Yes
N.No
b.Have you bought an umbrella in Trivandrum?*
Y.Yes
N.No

75
Appendix B

Shop Survey Questionnaire

1. The Date of establishment (DoE) of your business?
2. If the DoE is recent, then what did he/she do before?
3. Could you compare your business/previous job conditions before
and after the setting up of IIST (Note: Applicable if DoE is before estab-
lishment of IIST, Valiyamala Campus or if he worked somewhere )?
Earnings Work Environment
4. Currently, what is the turnover that you get from your business?
What percentage of that can you attribute to as the result of setting up of
IIST?
Daily - Or Monthly -
5. Could you comment upon the development IIST has brought about
in the locality (Note: Development in the broad sense can include roads,
electricity, transport, health, education etc.)?
Roads Electricity Health Education Business/Trade

76
 6. How does IIST affect your day to day life? Do you think it has
played an active role in employment generation in this locality?
7. Is there any negative effect due to this college? Do you feel that it is
impacting your life adversely?
8. Which are the items that are most sought after by the students?
9. How and from where do you purchase your stock?

77
Appendix C

Staff Survey Questionnaire

1. Current Occupation: 2. Current residential location: 3. Year of join: 4.
Previous occupation: 5. Have you worked in any government employment
schemes before this? a) Yes b) No 1. If yes, what? 2. What benefits did
you get? 3. How much has it helped? 6. Do you have a bank account :( if
yes name the banks in which you have an account?) 1) 2) 3)
a) Did you do it after Jan Dhan Yojana or before? b) Have you linked it
with other schemes like LPG? 7. Approximate salary earned from IIST: a)
Below 1000 b) 1000-5000 c) 5000-10000 d) 10000-15000 e) 15000-20000
f) Above 20000? (Specify approx. salary):
8. Is this sufficient for your day to day activities: a) yes b) no
9. HOW HAS IIST AFFECTED YOUR LIFE STYLE?
10. Have you registered for the Insurance Schemes by the Govern-
ment?
a)PM Surakhsha Bima Yojana - yes/no

78
b)PM Jeevan Jyoti Bima Yojana -yes/no
c)Sukanya Samriddhi Scheme -yes/no
Do you feel these are going to help you? -

79
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