Man­age­ment Courses to Burn a Deeper Hole in Your Pocket

Fees in top B-schools to rise by .₹ 46,000-3.2 lakh, de­pend­ing on the in­sti­tute

The Economic Times - - Front Page -

Sreer­adha D Basu & Ran­jit Shinde

Mum­bai: At least nine of In­dia’s top busi­ness schools have ei­ther in­creased or are in the process of rais­ing course fees by 7-30% for man­age­ment as­pi­rants this year, cit­ing in­fla­tion­ary pres­sures and ris­ing op­er­a­tional ex­penses. That trans­lates to fee in­creases of .₹ 46,000 to .₹ 3.2 lakh, de­pend­ing on the in­sti­tute.

The In­dian In­sti­tute of Man­age­ment (IIM), Lucknow, has ef­fected the steep­est hike of 30% for the Class of 2018 (2016-18 batch), fol­lowed by IIM Kozhikode (23%). While the for­mer has raised fees to .₹ 14 lakh, Kozhikode has in­creased it to .₹ 16 lakh ( see chart).

“A fee hike was in­evitable to keep pace with in­fla­tion, pay hikes and cost of in­fra­struc­ture,” said IIM Ranchi Di­rec­tor Anindya Sen. The in­sti­tute has hiked fees by 19% to .₹ 12.5 lakh.

Ru­pesh Pati, chair­per­son of the post-grad­u­ate pro­gramme in man­age­ment (PGP) at IIM Kozhikode, echoed this ob­ser­va­tion. “In­put costs have gone up — whether books, buy­ing case stud­ies or build­ing in­fra­struc­ture.”

In­dia’s most ex­pen­sive man­age­ment pro­gramme is of­fered by IIM Ahmed­abad, which in­creased its fees by 5.4% to .₹ 19.5 lakh. Next is IIM Cal­cutta, which has raised fees 16.5% to .₹ 19 lakh.

Pri­vate schools such as Man­age- ment Devel­op­ment In­sti­tute (MDI), Gur­gaon, and In­ter­na­tional Man­age­ment In­sti­tute, (IMI) Delhi, have also in­creased fees. At MDI, tu­ition fee is up 7% at .₹ 17.15 lakh, while IMI has raised it by 3% to .₹ 14.96 lakh.

XLRI is likely to raise fees by up to 7%, said Su­nil Varugh­ese, chief brand and sus­tain­abil­ity of­fi­cer at the in­sti­tute. The Jamshed­pur­based B-school cur­rently charges .₹ 17.95 lakh for its two-year course.

“Un­like the IIMs, pri­vate B-schools can’t in­crease their fees be­yond a point. There’s also a cap on the num­ber of stu­dents we can take in. Given that our cap­i­tal ex­pen­di­ture is borne en­tirely by us, we need to in­crease our rev­enue from other sources,” said Varugh­ese.

With the cur­rent round of fee in­creases, the cost of man­age­ment ed­u­ca­tion at the top in­sti­tutes has gone up four-five times in the past nine years. Fees at IIM Ahmed­abad and IIM Cal­cutta, which were .₹ 4 lakh nine years ago, have risen al­most five-fold to .₹ 19.5 lakh and .₹ 19 lakh, re­spec­tively.

An ETIG anal­y­sis shows tu­ition fees at ma­jor B-schools have risen faster than in­fla­tion.

B-School Fee Hikes This Year

Top B-schools hik­ing fees by 7-30% cit­ing in­fla­tion­ary pres­sures and ris­ing op­er­a­tional ex­penses


IIM Cal­cutta

IIM Lucknow

IIM Kozhikode

IIM Ahmed­abad

IIM Ranchi

IIM Trichy

MDI Gur­gaon

IMI Delhi

(` Lakh)

The air­waves are valid till Septem­ber 20, 2030.

“Bharti Air­tel and its sub­sidiary Bharti Hex­a­com have en­tered into de­fin­i­tive agree­ments with Air­cel Ltd and its sub­sidiaries Dish­net Wire­less Ltd and Air­cel Cel­lu­lar Ltd to ac­quire rights to use 20 MHz of 2300 band 4G spec­trum for eight cir­cles for an ag­gre­gate con­sid­er­a­tion of .₹ 3,500 crore,” In­dia’s largest telecom com­pany said in a fil­ing with the Bom­bay Stock Ex­change af­ter the stock mar­kets closed. “The trans­fer of the right to use (4G spec­trum) for Andhra Pradesh and Odisha is sub­ject to re­vi­sion of spec­trum caps with the up­com­ing auction to be con­ducted by the telecom de­part­ment,” Air­tel said.

ET was the first to re­port on the Air­tel-Air­cel deal talks in its edi­tion on Oc­to­ber 7, 2015. Peo­ple fa­mil­iar with the RCom-Air­cel talks had sub­se­quently said the two had de­cided to re­tain Air­cel’s 2300 MHz spec­trum to be able to share and trade at a later stage. But, un­der pres­sure to cut debt, Air­cel fi­nally went ahead with the sale to Air­tel. Lately, the Su­nil Mit­tal-founded Bharti Air­tel has been on a 4G spec­trum ex­pan­sion over­drive. Af­ter buy­ing Qual­comm’s air­waves in four cir­cles, Air­tel pur­chased Augere Wire­less, which owned 4G air­waves in the Ch­hat­tis­garh-Mad­hya Pradesh cir­cle.

Both deals net­ted Air­tel air­waves in the 2300 MHz band and raised its holdings in that par­tic­u­lar band. Last month, Air­tel bought Video­con Telecom’s 4G air- waves in the 1800 MHz band in six cir­cles for .₹ 4,428 crore, also through a band­width trad­ing deal. Bharti’s ag­gres­sive 4G air­waves push comes when in­dus­try ex­perts ex­pect in­cum­bents with wider data spec­trum holdings to be in a stronger po­si­tion to ring-fence their cus­tomer base from any po­ten­tial at­tacks from Jio, which till now was the only owner of pan-In­dia 4G spec­trum. Air­tel was the first to start 4G ser­vices, on the 2300 MHz band, in 2012. It stepped up the roll­out in the past few months, ex­pand­ing to more than 350 cities and towns, an­tic­i­pat­ing com­pe­ti­tion from Jio, which is ex­pected to soft launch its 4G ser­vices shortly and start wider com­mer­cial oper­a­tions by De­cem­ber.

Air­tel has rolled out 4G in 15 cir­cles, Voda­fone In­dia in five and No. 3 car­rier, Idea Cel­lu­lar, in 10 cir­cles.

In­dus­try ex­perts said it makes sense for Air­cel to exit the 4G turf, which will be dom­i­nated by Air­tel, Voda­fone, Idea and Jio. RCom has en­tered into spec- trum shar­ing and trad­ing deals with Jio, which will be ef­fec­tive even if RCom’s deal to merge its wire­less busi­ness with Air­cel fruc­ti­fies. Maxis-owned Air­cel paid .₹ 3,438 crore to win air­waves in the 2300 MHz band in the 2010 spec­trum auction. Like most com­pa­nies that bought the air­waves at the time, Air­cel has barely met roll­out obli­ga­tions. Its 4G net­works are func­tional in Tamil Nadu, Andhra Pradesh, Bi­har, Odisha, As­sam and Jammu & Kash­mir for en­ter­prise cus­tomers only. It’s yet to launch any ser­vice in the North East and West Ben­gal.

A sec­tor an­a­lyst at a lead­ing global bro­ker­age said Air­tel may have paid a “pre­mium, since it has shelled out .₹ 3,500 crore for Air­cel’s 4G spec­trum, which has a resid­ual life of only 14 years, un­like Air­cel, which had paid .₹ 3,438 crore six years ago for these air­waves for a 20-year pe­riod.” The need to ex­pand band­width holdings given Jio’s en­try was the over­rid­ing rea­son, he added.

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