The IIMs are considering hiking fees. (That implies 75% higher fees than the 2002 batch; CPI inflation in the same 5 year period would have been 25%). Last time, when Murli Manohar Joshi had forced IIMs to reduce fees; people who have access to media were dead against that step. So now, when the fees have been hiked by 15-20%; people must be jubilant.
I would rather not join the euphoric party and would like to take a slightly contrarian view to the whole IIM fees hike issue.
Time and again, it is heard that IIMs spend 5 to 6 lacs a year to provide education to the students. I have first hand experience of only one IIM where I spent two years; and based on that I can say that I find this number astounding. In our batch, we had to repeatedly raise issues with the authorities to improve the quality of the illegible reading materials, broken benches and dysfunctional ACs of the 4 classrooms that were there. The library was apparently the largest in
Some of the arguments given for fees hike is that students will not stop going to IIMs even if fees are raised much higher. Consider this, many would go for a bypass surgery whether it cost 3000, 3lacs or 3 Cr or 30 Crs. Does that mean one should charge 30Cr for a bypass surgery? You can't have free market policies, monopolies and cartelized pricing at the same time.
Another argument is that the poor can get loans and paybacks are high. Consider a poor student whose father earns Rs 3000 a month and whose family has never taken a loan. Imagine the mental block faced by such a student when he has to take up a loan of 3.5 lacs at 10-15% interest.
The other logic is that there is no point subsidizing these MBAs who don’t do anything for the country anyway. Well, even if one considers a subsidy amount of 3lacs/student/year; the average tax/repatriation for an employed IIM MBA reaches 3 lacs within 2-3 years of service; and he is employed for 30-35 years.
Students for IIMs and IITs are valued in the market not because of the education they receive at these places; but because of entrance exams that filter a very small fraction from a large number of applicants. Imagine the same IIM/IIT system with no professor or classroom infrastructure; let only the course outlines be provided to students; and multiple questions given to them to grade their performance in these courses. The market value of the student from such a system largely remain the same.
The support for fees hike comes from fashionable free market rhetoricians in the industry; students who have got into IIMs (who are under implicit pressure to support their professors); and ex-students (for whom it doesn’t matter anyways, and they want to retain some exclusivity of the brand). Ask any average aspirant candidate from a middle class family, ask his father; and the response will be quite different. But the voices of these people are not shown in the media.
While I fully endorse greater freedom of operations to IIM management; I would support fees hike only once the cost structure of IIMs is made transparent to students. Only then can a student say no when it comes to paying for the salary of a professor who hasn’t taken a course for years.