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IIT has become a global brand irrespective of global rankings.
This write up attempts to reason out what makes IITs a great institution.

Historical Backdrop:After the end of the Second World War and before India got independence, Sir Ardeshir Dalal from the Viceroy’s Executive Council foresaw that the future prosperity of India would depend on technology. Therefore he conceptualized institutes that would train such work forces in the country itself. This is considered to be the first conceptualization of the Indian Institutes of Technology.

Dr. Humayun Kabir set up a 22 member committee to prepare a proposal, and made Sir Nalini Ranjan Sarkar the chairman. The Sarkar Committee recommended in 1945 that at least four Higher Technical Institutes on the lines of famous Massachusetts Institute of Technology, U.S.A. be established in the Eastern, Western, Northern and Southern regions of the country.Post-Independence, Pandit Jawaharlalenvisioned that the IIT system would over time provide scientists and technologists of the highest caliber who would engage in research, design and development to help building the nation towards self-reliance in her technological needs.The first Indian Institute of Technology, IIT Kharagpur was established in 1951, the second IIT Bombay in 1958, the third and fourth IIT Kanpur and IIT Madras were set up in 1959 and IIT Delhi in 1961 was the fifth. After a long gap IIT Guwahati was established in 1994.  India’s first technical institute, set up in 1847 and known as the Thomson College of Engineering and subsequently the University of Roorkee, was ordained as the seventh IIT in September 2001. In the year 2008, six new IITs were started: IIT Bhubaneswar, IIT Gandhinagar, IIT Hyderabad, IIT Patna, IIT Rajasthan, and IIT Ropar. This was followed by two more IITs in 2009: IIT Indore and IIT Mandi. At present there are 23 IITs in India.
Ingredients of Success:Any organization to be successful has to have its foundation right. That is why the brief historical background is given above. An institution becomes sustainable and successful if its structure and system is sound and it has visionary leadership at the helm.  An educational institution becomes sound if it enjoys autonomy with commensurate responsibility. Further, it should not starve of resources particularly financial resources. It should not have any kind of interference; political, beuarocratic or otherwise.
StructureAn act was passed in Indian parliament called Indian Institutes of Technology Act 1961 and in the same year Parliament decreed the IITs as ‘Institutes of National Importance’.The act set the structure in place. IIT Council is the apex body headed by the cabinet Minister of Human Resource Development of the central government and is composed of Chairmen of Boards of Governors of all IITs, Directors of all IITS, renowned scientists, engineers, educationists, policy makers and industrialists. This IIT Council takes all policy decisions which are common for all IITs for example admission policy and process. At the next level is Board of Governors (BoG) of individual IIT. This BoG is for taking policy decisions of the particular IIT. Chairman of BoG can be in a way compared with Chairman of Board of Directors of a company. The Director of an IIT is akin to Chief Executive Officer (CEO) who has to execute the decisions taken by the BoG where he is also one of the members.  This is not like university system where the Vice Chancellor is like Chairman cum Managing Director of a company i.e. he is heading the policy function as well as executive function. What goes on in all IITs collectively or similarly is also quite often called IIT System. IIT act empowers the Director of an IIT to appoint any number of Deputy Directors and Deans and delegate his powers to these functionaries. In university system Deans generally have advisory role and Vice Chancellors quite often do not have a provision to delegate their executive powers to the Deans. It is an interesting feature of IITs that whether it is Library or Hospital or Security the buck stops at Chairman, Advisory Committee of Library or Hospital or Security. This Chairman is a Professor. So the last points of controls are not left in the hands of non-teaching staff or functionaries. It improves the respectability of teachers and makes the system clean. This helps in reducing red tape in the institution. This has prevented IITs to go the way universities in the country have gone particularly state universities and private universities. There are no such power centres as the Chairmen of such Advisory Committees are appointed on rotational basis. This also prepares such Professors for subsequent academic leadership roles.
System: The system is fair and transparent. Admission in various programs is an example. Admission process is fool-proof and temper-proof. No amount of influence can get an unworthy candidate to be admitted. System also ensures great degree of autonomy. Autonomy with regard to teaching, setting syllabus and curriculum, setting up of question papers and assessment and evaluation of performance of students. As a practice in entire IIT system answer-sheets are shown to the students without fail before the result is finalized.  And the student is free to discuss the assessment made by the teacher with him. Interestingly there is no Controller of Examination in IITs as there is no need for that. Results are compiled, computed and declared at the level of Assistant Registrar or Deputy Registrar under the guidance of Dean Academics.  No teacher leaves his class for attending meetings which is so common in most educational institutions. In most of the IITs even the Director loves to take classes to remain in touch with the subject, the students and to set an example for others. Most of the authorities like Deans and Associate Deans etc. fix up their classes in the forenoon session so that they can attend to administrative responsibilities in the afternoon and evening. Meetings, unless purely academic in nature, are generally co0nducted in the afternoon session. 
History, Legacy, Culture, Customs, Traditions & Practices: During the early years, the IITs benefited in varying degrees from material assistance and academic cooperation from developed countries — IIT Bombay from the Soviet Union, IIT Madras from Germany, IIT Kanpur from the United States, and IIT Delhi from the United Kingdom. These first five IITs set in place open culture, efficient processes and open interactive environment through exchange of faculty with the best institutions of the world and imbibing healthy practices and culture of world renowned institutions. These old IITs are helping and guiding the IITs which are established subsequently.It is interesting to note that three of the oldest engineering institutions of India got converted into IITs later on. The first being India’s first technical institute, set up in 1847 and known as the Thomson College of Engineering and subsequently the University of Roorkee It became the seventh IIT in September 2001. The second was from Banaras Hindu University established in 1916. The three of the erstwhile engineering colleges of BHU, namely BENCO, MINMET and TECHNO, were merged to form the Institute of Technology (IT-BHU) in 1968. IT-BHU became IIT (BHU) on June 29, 2012 by an Act of Parliament.The Indian Institute of Technology, Dhanbad was formerly known as Indian School of Mines and was a Central University before it was converted into an Indian Institute of Technology (IIT). It is the third oldest institute (after IIT Roorkee and IIT (BHU) Varanasi) which got converted into an IIT. It was established by British Indian Government on the lines of the Royal School of Mines – London, and was formally inaugurated on 9 December 1926 by Lord Irwin, the then Viceroy of India. On August 2, 2016 it became The Indian Institute of Technology, Dhanbad commonly known as IIT (ISM).The above referred three IITs face a different set of challenges due to their legacy, culture and traditions to be canalized into IIT system. It will be interesting to watch their journey in times to come.The new IITs are mentored by old reputed IITs. These new IITs do not have legacy issues unlike the above three.
Funding: 23 IITs along with 31 NITs get 25% to 33% of entire budget of higher education of government of India.As per the Report of the Sub Committee constituted by the Council of IITs, the estimated average expenditure per student in the Indian Institutes of Technology (IITs) is Rs.5.2 lakh per year. Against this, the fee charged from under graduate students is Rs.2.00 lakh per year, with provision of full fee waiver in respect of SC/ST/PH students, most economically backward students whose family income is less than Rs.1 lakh per annum; and two-third fee remission to other economically backward students whose family income is between Rs.1 lakh to 5 lakh per annum.
Alumni SupportBy now the alumni base of IITs is very large in India and globally. They have been not only supporting the students who are studying and graduating from IITs in a myriad ways but even funding decent sums of money. Vinod Gupta School of Management at IIT Kharagpur and Shailesh J Mehta School of Management at IIT Bombay are glowing examples. This has also helped in setting up schools within IITs.
To sum up the origin, legal structure and system, History, Legacy, Culture, Customs, Traditions & Practices, Liberal funding, Autonomy and Alumni support make IITs great institutions.