Fee Hike by IIMs

Recently, IIMs declared a fee hike which is almost two-fold for 2-years post-graduate management course. After this announcement, soon IIM-B and IITs joined the bandwagon of hiking fees for their programs The reason is: management of IIMs wants to tackle the rising cost of infrastructure and inflation. Fee hike seems to be a simple, straight-forward solution for the management. But, the country’s elite institutes, IIMs and IITs, have not clearly justified the fee hike and chosen a short-term solution for rising costs.  Moreover, IIMs convinced HRD ministry saying that this hike would not affect the poor, well-deserved student and they would get financial aids like scholarships. This means that now prospective students, who do not fall under “poor” category, have to shell out few more bundles either from bank loans or from personal finances. Overall, students’ debt will significantly rise and will continue to hamper the growth of students even after MBA.


In fact, IIMs are renowned for their infrastructure, pedagogy and fat salaries for post-MBA students. Most of the students are ready to take up career in Business because of fat post-MBA salaries. After all as famous adage says: education is a good investment. In today’s time when knowledge is given more importance, MBA is definitely a good investment and is definitely proving the adage’s words true. Who wants to leave the opportunity to spend 6-7 lakhs in 2-year MBA course and earn more than 10 lakhs every year post-MBA? If we calculate ROI (Return on Investment) for this, it certainly comes out to be a very good figure (assuming that an average student’s pre-MBA student is approximately 3-4 lakhs). But, after fee hike, the situation has changed significantly. Now, one has to invest for over 10-11 lakhs and earn 10-12 lakhs every year post-MBA. This indicates that the time taken to start enjoying their investments returns is now deferred and students will certainly have more debt after MBA. This doesn’t stop students, who can afford this hike, to continue dreaming about the IIMs. What about dreams of poor or middle-class family students? There will be certainly worries about finances creeping in minds of these students before filling up forms of CAT.


Providing more scholarships or financial aids could be a solution. But, in India not maximum population will fetch great benefits from MBAs as people feel they are not (directly) linked to management or corporate world. For few Indians, petrol/diesel prices and food commodity prices are more important than the fee at IIMs. People of this country do not feel the pinch unless linked directly to world of Management and MBAs. In India, people pay taxes hoping that infrastructure improves, facilities provided by government increases and many more such expectations are always heard from a common man. In such country, is it really feasible for government to spend taxpayers’ money in management education? This can be a significant factor for HRD ministry to consider against the fee hike by IIMs.


One can argue that students are getting fatter salary every year which compensates the fee hike. Also, since India is on path of becoming developed country and currently is growing economy, this hike in fees should NOT be a major concern. If India has to continue the growth, India needs great leaders and great managers. But, what such argument fails to look at is: the growth is not equally distributed. Also, there’s always a risk associated with economy. What if the economy slows down after 1 or 1.5 years? Will students surely get equally fat salaries as IIMs claim? Will IIMs decrease their fees in case of slow-down in economy?


Moreover, considering the stature and “brand” of IIMs, it is not impossible for IIMs to look for alternatives to raise the funds. IIMs can also choose to go for Research path and Management consultation to Indian Corporate who looks for graduates of IIMs particularly. In presence of these possibilities, why IIMs chose to go for fee hike and burden students with more financial debt? This question is still floating and need to be answered by IIMs.


Apparently, IITs also followed this trend and increased their fees. These hikes only indicate that the institutes want to raise more funds using their brand values and have chosen simplest option in front of them. If India has to be considered as a developed country and achieve her dream of super-power by 2020, we must all work to improve our education system and provide equal opportunity to all parts of the society.


(The view is personal and for internal purpose)


  1. though fee hikes can easily escape in the name of “Fat Salaries” that post MBA of these institutes get, but this hike would certainly mar the entrepreneurial instincts of the students, which was in a rise in yesteryears


  2. Certainly… This fee hike will increase student’s debt and which will discourage entrepreneurs to get start with their start-up.

    Thanks for sharing your views.
    Appreciate if you can share your views on my other blogs too…


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