There was a more pertinent reason too from the academic point of view. Though India has continued to be a single organic cultural entity for the last five thousand years or so, a policy initiated by the UGC in the sixties, and adopted in many Indian Universities, encouraging the bifurcation of the Departments of History into separate Departments for Ancient and Modern periods has resulted, though perhaps innocuously, in the emergence of mostly mutually uninteractive groups of historians. With other forces too taking advantage of this situation, the field of history is now vitiated with compartmentalized perspectives and partisan overtones ignoring India's unity and cultural continuity. The Mythic Society felt that there is need for an academic institution devoted to promote Indian studies as a unitary entity, cutting across arbitrary chronological divisions and perceiving all aspects of Indian society and culture throughout the ages as part and parcel of a larger systemic continuum.

The Institute has been named after Professor M.H. Krishna (1892-1947), who was indeed an Indologist in the full sense of the term. He was the Director of Archaeology in the erstwhile princely state of Mysore and a Professor of History in the University of Mysore. His varied contributions range from conducting archaeological excavations in Prehistoric and Early Historical sites, through publications on history, epigraphy, numismatics, and architecture and sculpture to studies on Tipu Sultan and 18th and 19th century archival material. The Mythic Society celebrated his birth centenary in 1991, and it is at that time the idea of the Institute of Indology was conceived.