Master of Business Administration (MBA) is among one of the most sought after career options in India. However, the cost of studying at the Indian Institute of Management (IIMs) in recent years has increased manifold. In the last 15 years, IIM Ahmedabad has hiked its fees by 575% from Rs four lakh in 2007 to Rs 27 lakh at present, receipts shared by Maheshwer Peri, entrepreneur and founder of a student consulting platform, Career360, for the academic year 2020-21, showed. “IIMs have singularly led higher education to become expensive and unaffordable,” Peri alleged.
In a Twitter thread Peri claimed that the rise in the fee structure at IIM Ahmedabad has been against the inflation growth which has remained at 146% during the same period. “For a country starved of funds for education, IIMs increase fees every year and invest the surplus to earn 8% when the inflation is 6%. These market driven fees have single handedly contributed to the increase and now unaffordable fees structures,” Peri wrote.
IIMs don’t need to raise their fee structure each year as they have enough funds to sustain, Peri further claimed. Even if the institute charges one third of the current fee structure, it would still be in surplus, he pointed. IIM Ahmedabad currently charges 200% above its actual requirement, according to the claim. The institute is using the surplus amount for investment purposes, Peri said. “As of March 2021, IIM-A invested Rs 1345 crore in government securities, term deposits, among others. In one year alone, the investments increased by Rs 136 crore implying that the tuition fees of Rs 105 crore were collected to be banked,” he said. The monthly expenditure of IIMs is about Rs 16 crore. However, they had cash in the bank of Rs 42 crore in 2021 and Rs 79 crore in 2020, according to the receipt.
Over the past couple of years, several IIMs, both new and old, have increased their fee structure including IIM Lucknow, Calcutta, and Bangalore. A lack of government intervention and accountability in regulating this hike has raised concerns. IIMs have the autonomy to decide its fees, selection and removal of chairperson or director, among other key decisions. However, Business Schools which come under the ambit of UGC and AICTE are restricted to make certain amendments.