The Delhi School of Economics - regarded as India's equivalent
of the London School of Economics, and where the Nobel laureate Amartya Sen taught in the 1960s - is on the verge of bankruptcy because of a huge cut in government spending on higher education.
It is looking for alternative sources of funding and an appeal has gone out to the corporate sector and affluent former students for help. But the response has not been encouraging. Some of India's finest economists have either read at the Delhi School, as it is popularly known, or taught there.
The DSE is one of the many colleges of Delhi University that could face closure if they do not get immediate financial assistance.
Some colleges have just about enough money to pay this month's salaries.
University vice-chancellor Vrajendra Raj Mehta has called it the worst financial crisis in its 75-year history. "We are finding it very difficult even to maintain the system, let alone sustain academic and research activities," he said.
The crisis has been compounded by the huge pay rise that university college teachers across the country have extracted from the government.
Most colleges have diverted money from academic programmes to pay. "The situation
is desperate," said Anil Wilson,
principal of the prestigious
and relatively affluent St Stephen's College.
Moved by its plight, a Delhi University alumnus A**** Ganguli, now a professor at an American university, has donated $85,000. There is a move to set up a "Friends of Delhi University fund" in major United States and European cities in the hope that Indians there may be persuaded to contribute to it.
Delhi University, founded by Englishman Maurice D. Gwyer, recently celebrated its platinum jubilee amid the financial gloom.
The University Grants Commission has not only cut funding as part of the government's plan to spend more on school education, it has also been irregular in
paying up. It owes nearly R250 million (about Pounds 35 million) to Delhi University and its colleges.