New Delhi, April 1: The Indian Institutes of Management (IIMs) decided to step up fees this year to meet demands on infrastructure if OBC reservations are introduced, top officials of some of the B-schools have said.

The need to build new hostels and classrooms to accommodate additional students in the event of OBC quotas “clinched” the decision to hike fees, three officials who attended the last meeting of IIM directors told The Telegraph separately.

The decision to raise fees was taken at that meeting held earlier this year.

The revelation comes even as the government weighs its options on possible strategies to convince the IIMs to reconsider the sharp increase in fees.

IIM Ahmedabad has increased the fee for its coveted two-year management course from Rs 4.5 lakh to Rs 11.5 lakh. Bangalore has raised its fee by 60 per cent. The postgraduate management programme at IIM Calcutta will now cost Rs 7 lakh instead of the Rs 4 lakh charged last year. The other three IIMs have raised their fees by smaller amounts (see chart).

The raised fees, however, still fall short of the amount charged by the private Indian School of Business (ISB), the closest market competitor of the IIMs. The ISB, based in Hyderabad, charges $40,000 (around Rs 16 lakh) for its one-year postgraduate management course.

Arjun Singh, the human resource development minister, is unhappy about the sweep of the fee hike, sources said. But the ministry does not want to stoke embers of a simmering battle for autonomy, they said. The IIMs in Ahmedabad, Bangalore and Calcutta do not rely on the government for any funds, and, as autonomous institutes, are technically empowered to set their own fee structures.

“If the OBC quotas are implemented and we are suddenly told to take students in, we will be in a soup unless we are prepared with the requisite infrastructure,” said a senior official of IIM Ahmedabad.

HRD ministry officials reacted cautiously this evening, expressing apprehensions that the IIMs might be using the OBC quotas to buttress the decision to raise fees.

“It is naturally harder for us to object to the fee hike if it is because of OBC quotas. But the IIMs may also be getting back at us for the controversy over reservations last year,” an official said. The IIMs had objected to OBC reservations.

The OBC reservation bill has been passed, but the Supreme Court has stayed its implementation. Arjun had recently indicated that a fresh push would be made to convince the court of the legality of the quotas.

At IIM Calcutta, construction of a hostel complex and 14 vast classrooms is under way in preparation for the possible implementation of the quotas. “We will need this infrastructure if the quotas are implemented,” Dinesh Verma, chief administrative officer of the IIM, said.

Other officials at IIM Calcutta confirmed that the fee hike at the institute was motivated by the infrastructure expansion.

IIT hike hope

The IIM fee hike has fuelled hopes among IITs that the government would clear an old proposal by the technology schools to charge more.

“But the final decision will come from the government,” Surendra Prasad, IIT Delhi director, told PTI. The annual fees in the IITs could be doubled to Rs 50,000, he said.