Ahmedabad, April 2: If IIM graduates can take home a fortune, there is no reason they can’t pay more.
That is what N.R. Narayana Murthy feels and he said as much as he announced today that the new batch of postgraduate students who enrol in the Indian Institute of Management, Ahmedabad, will have to pay Rs 1.77 lakh a year, a hike of Rs 19,000.
The announcement of the 12 per cent increase came with another ' tie-ups and programmes abroad in the US, Singapore, Dubai and Muscat as part of the B-school’s offshore plans.
Narayana Murthy, who heads the IIMA board, said the yearly salary of graduates of the institute has increased by 30 per cent in the last three years. While the average salary was Rs 7.5 lakh last year, it went up to Rs 10 lakh this year, he pointed out.
The Infosys chief mentor said IIMA spends Rs 3.68 lakh on each student, but only half the cost is recovered by way of fees. This, he added, calls for evolving a model under which those who can afford to pay should not get any subsidy, while students from less affluent backgrounds can get need-based scholarships.
IIMA director Bakul Dholakia said the institute has set aside Rs 1 crore for such scholarships and, if required, the amount can be increased.
Narayana Murthy said the IIMA fee structure has not been revised since 2003. “We discussed escalation of costs and consequently the board arrived at a consensus to raise the fees. This hike is probably less than the annual rate of inflation.”
The increase will, however, not affect needy students, the B-school’s chairman added.
The decision to raise fees came a day after IIM Calcutta increased annual fees for its two-year management course to Rs 1.75 lakh, a hike of Rs 25,000, from the session starting May.
IIM Bangalore, the other B-school among the top three, had also agreed on an identical hike to Rs 1.75 lakh at its March 28 board meeting.
Narayana Murthy underlined that some mechanism should be worked out to attract the best talents as professors as the current pay structure ' around Rs 25,000 a month after deductions ' was a pittance compared with industry standards. But this can happen only when B-schools get more autonomy to take such decisions.
Apart from the fee hike, Dholakia said the IIMA board has approved conducting management programmes abroad.
Dholakia said the board has green-lighted a collaboration with France’s ESSEC for an advanced management course on the European school’s Singapore campus for which the two institutes have signed a memorandum of understanding.
The board, the director added, has also given the go-ahead to a collaboration with Duke University of North America for a similar programme for senior executives. The programme will be of four weeks, two in each institute.
Other offshore plans, Dholakia said, include management programmes in Dubai and Muscat where IIMA has already tied up with local partners.