Although the government wants to clamp down on fee-hike for premier institutions like Indian Institutions of Management (IIMs), corporate houses, academicians, and students are of the opinion that a fee-hike will not adversely affect students. As the IIMs are a powerful brand like the IITs, they are value for money. Also, the IIMs have to find resources for 27% OBC reservations like other central institutions.
Meanwhile, crucially, the prestigious two-year, post-graduate programme of the IIMs has in the past few weeks seen a staggering fee-hike that affects students the most. They have to appear for the rigourous common admission test (CAT) to get into the IIMs, which has been termed by the former IIM-A director, Bakul Dholakia, as the ?toughest? management examination in the world.
The tripling of fee for instance, by Indian Institutes of Management (IIM-A), many believe that it would make it an elitist institution accessible only to the rich leading to a widening divide between the classes. IIM Ahmedabad increased the fee from Rs 5 lakh for both the years of the course to Rs 11.5 lakh, while IIM Bangalore had decided to increase the fee to Rs 9 lakh from Rs 5 lakh. IIM-Lucknow has raised its fees from Rs 2 lakh to Rs 2.5 lakh.
IIM Kolkata has, similarly decided to increase the fee to Rs 6 lakh for the entire course from Rs 3.75 lakh at present and IIM Kozhikode decided to increase the fee to Rs 6 lakh for the two-year programme from Rs 3.85 lakh while IIM Indore increase the PGP fees by Rs 1.20 lakh for the new academic session?for PGP, the fees for the first year shall be Rs 3 lakh and Rs 3.1 lakh shall be the fees for the second year. The fee for PGP 2007 batch at IIM-I is Rs 1.90 per year.
Endorsing the fee-hike, executive director, KPMG, Sangeeta Singh, says, ?Quality education needs high quality investment in terms of faculty both in terms of number and quality, research and project funding, infrastructure for IT–software and hardware, building, library, guest faculty, interaction with corporate houses, all of which needs funding. As long as IIMs are able to maintain high standards they will be able to justify he fees.? Commenting on reservations, she adds: ?Reservation at the highest levels of education erodes merit and is reverse discrimination.?
According to sources, last year, IIM-A asked an agency to calculate the annual cost-per-student to ascertain the fee. The agency worked out the cost at Rs 3.93 lakh per student and accordingly, a report was submitted in November 2007. The report was taken as a reference for finalising the new fee structure for 2008-09.
Meanwhile, says Shekhar Chaudhuri, director, IIM-Calcutta: ?For the first year of 2008-2010 batch, the fee will be Rs 3 lakh while the decision for the second year is not yet finalised.? He points out that the issue of quality needs to be looked at from a larger perspective. ?With increasing size of the student body we would require a larger number of high quality faculty members. Currently, there is a shortage of well-qualified faculty in the country. To cope with the burgeoning demand we would have to take on extra load to respond to the challenge facing us. The IIMs will need to create classrooms and hostel for the increased student numbers.?
To ease up the pressure on students, fee waivers and loans have been proposed such as 100% waiver in fee for students whose family income is below Rs 1 lakh and 85% fee-waiver for students with family income lower than Rs 2 lakh, apart of course from loans. Says IIM- B director Pankaj Chandra, ?We have developed a strong financing programme supported by collateral fee loan (upto Rs 10 lakh) with local banks and have increased the funds in our scholarship programme from Rs 91 lakh to Rs 1.5 crore. The loan is available to all students and the scholarship is for needy students. So the fee will not have any impact on a poor student.? Several students have given a thumbs up to the fee-hike. It is obvious that the IIMs are looking for financial autonomy essentially to fund their expansion programme and meet the rising cost of acquiring and retaining faculty.
A fresh Ahmedabad based IIM pass out, Neha Solanki says, ?The fee hike will not affect the Brand IIM. On the contrary, there are chances of them becoming a bigger brand by raising fees and offering even better education.? She is of the opinion that the kind of professional environment IIM offers at both in the classroom and hostel, gives students a feel of the actual working conditions. Academics and faculty are the core strengths of the IIMs.
Endorsing her views, an MBA from IMS Dehradoon, Ashutosh Pandey believes that fee is not a big deal since, recovery of the fees is easily possible through the offered packages. In the case of IIMs he says, ?The IIM believes in practical teaching. Students should get a chance to learn under actual working conditions through case studies. Neither the fee hike nor the reservations will affect the brand IIM.?
Indian industry that descends every year to hire IIM students in their campuses across the country has been positive in its reaction to the fee-hike. T V Mohandas Pai, head, human resource development Infosys Technologies, says: ?The fee hike in IIMs is a good move. IIM is a premium product and the cost of education should reflect that. The government should stop giving subsidies to the IIMs and let them stand on their own feet. The fee should be hiked so that the IIM can pay their faculty well and get good people.? He feels that poor students should be given scholarships to apply for an institute of their choice, while, Ravi Ramu, chief financial officer cum director of real estate major Puravankara Projects Ltd says, ?That the IIMs have played a vital role in providing corporate India and MNCs top quality management talent over the last two decades is well established? Increasing fees is an imperative for the teaching and support staff to be appropriately compensated and facilities upgraded, expansion plans to be financed and business returns generated. After all the students need to pay a market price for the value they obtain ? they can well afford it.?
Although the Union Human Resources Minister, Arjun Singh, has held that these elite management schools were established by the government and that there was ?no question of withdrawing support or grant to them?, an IIM-B alumnus D Muralidhar, who is also senior vice-president of Federation of Karnataka Chambers of Commerce and Industry (FKCCI) says, ?I strongly support the move of all the IIMs in increasing the annual fees.? Muralidhar said the government’s subsidy for education should be restricted only upto high school level. It is well known that good pay attracts good faculty and this is a model that is followed in the US. S Viswanathan, chairman of CII Karnataka said the IIMs should be self-funding and not dependent upon any authority for its finance requirement. It should also be able to take decisions without any directions from the outside. He added that the IIMs are not able to attract good faculty. If they have to succeed in this, it is necessary to pay salary comparable to the industry. However, PK Shashtri, director of SLIMS college, Ahmebadad, says, ?It is not a brand image that works every time. Not all the students get annual packages of Rs 15-Rs 18 lakh at IIMs. It depends on one?s own capabilities. However, better resources do provide better opportunities,?
As far as 27% reservations for other backward castes (OBCs) is concerned, Chaudhri of IIM-C says, ?We will be ready for increasing our intake by 6% of the present sanctioned class size of 300 this year itself. We are expecting that we would have the additional classrooms and hostel rooms for taking in an additional 90 students during 2009-2010 and thereafter an additional 54 students in 2010-2012.? In accordance with the Moily Committee recommendations, IIMs will be required to implement OBC reservation in a phased manner over a period of three years. Pai of Infosys, ?The government should not spend the taxpayers’ money on funding and creating institutions, but fund a million students annually, through a national scholarship programme also including the OBCs.?
Meanwhile, following in the footsteps of IIMs, the seven IITs, apart from proposing to double their fee to Rs 50,000 plan to implement the 27% OBC quota in accordance with the Supreme Court ruling. IIT-Kharagpur is currently the nodal institute for the IIT-JEE that was held recently. Says Partha Pratim Chakraborty, acting director, IIT-Kharagpur, ?IITs, plan to implement the 27% OBC quotas in three phases once it gets the government order starting with 2008-09 academic session.? These elite institutions have exemplified meritocracy in a developing nation and the country will watch to see if there is any dilution of standards.
With inputs from Rutam Vora and C Jayanthi