New Delhi: The Indian Institute of Management (IIM), Lucknow, broke with the country’s other leading business schools by deciding on Friday to cut the fees for its flagship postgraduate programme to make the course more affordable in a strained economic situation that has led to management graduates facing difficulties with placements this year.
The fee has been reduced to Rs.10.8 lakh from Rs.12 lakh, institute director Devi Singh said. At a time when peers are increasing fees, the move is a surprise, and Singh said this was “precisely the point”.
The move will make the institute more accessible, said J.J. Irani, chairman of IIM Lucknow’s board of governors.
“This decision of ours will not only help many needy students undertake education at institutions like ours, it will also widen the area of selection among eligible students for undertaking the education in IIMs,” he said in a statement. “In today’s environment when education is becoming costlier, IIM Lucknow would like to take a lead.”
The cost of education can’t keep going up, Singh said.
“The course fees are intimidating the poor and middle class students who want to apply,” said Singh, who runs an institute that’s usually ranked fourth after the IIMs at Ahmedabad, Bangalore and Kolkata in a country that has nearly 4,000 business schools. The IIMs are considered an epitome of quality management education in the country.
The Lucknow institute’s decision comes in the wake of those at Ahmedabad and Bangalore increasing fees. IIM Ahmedabad has increased the course fee to Rs.16.6 lakh for the 2013-15 batch from Rs.15.5 lakh for the 2012-14 batch. IIM Bangalore raised it from Rs.15 lakh to Rs.17 lakh, becoming the costliest of the IIMs.
Singh said course fee increases may not be the best way to generate funds and that even universities such as Yale get just 10% of their revenue from fees.
“In the last nine years, the institute’s (IIM-Lucknow) impetus has been on efficient financial management and broad-basing our revenue sources,” Singh said in a statement. “We have been successful in achieving this. We have no reliance on government grants now. Everyone can be assured that this decision of ours does not mean reduction in either the quality of education, infrastructure or any other services in the institute.”
The move by IIM-Lucknow seems logical, given the difficulties in placements.
“Students now are conscious about return on investment. When the economy is not doing well and the placement situation is stretched, such a move is a sign of this realization,” said an education expert in New Delhi, requesting anonymity.
Mint reported on 18 March that many B-Schools, including the IIMs, struggled to find employment for all their students this year, largely because of three reasons—an inflated batch size, many firms having shrunk their hiring plans and a lack of enthusiasm on the part of former key recruiters such as banks and other financial institutions.
IIM Indore held its convocation programme last week, before placing all its students.
“Generally, this year was tough for everyone in terms of placement,” Singh of IIM Lucknow said. For instance, an offer of Rs.10 lakh a year was down to Rs.7 lakh this year, he said, adding, however, that as a principle IIM-Lucknow doesn’t share placement details of students.
Ashish Bharadwaj, vice-president, Asia-Pacific, at Graduate Management Admission Council, which conducts the Graduate Management Admission Test (GMAT) for admission to MBA programmes, said: “On a broader level, leading Indian business schools have increased their fees significantly in the last few years, and the difference between Indian schools and foreign schools is not huge. Students will now become demanding, and institutes cannot avoid providing quality education.”