12 Apr 2016 20:43 IST

Private B-schools stick to existing fee structure

No formal communication on fee cap from AICTE as yet, they say

Just as top business schools across the country, including the government-led IIMs, are hiking their fees (as they do every year), the recent news about the All-India Council for Technical Education (AICTE) accepting the recommendations of the National Fee Committee to put a ceiling on the fees of privately held engineering and management institutions comes as a surprise.

According to the recommendations of the 10-member panel headed by former Supreme Court Judge BN Srikrishna, maximum full-time and development fees for the two-year MBA programmes should be between ₹1.57 lakh and ₹1.71 lakh, depending on the institute’s location.

The recommendations come as management aspirants are preparing to pay about ₹19.5 lakh to pursue the two-year PGDM at IIM-A. Additionally, IIM Calcutta, IIM Lucknow and IIM Kozhikode too have increased their fees to ₹19 lakh, ₹14 lakh and ₹16 lakh respectively.

On the other hand, top private, self-funded, B-schools, such as XLRI and TAPMI, charge ₹16.8 lakh (XLRI) and ₹14 lakh (TAPMI). BIMTECH will charge students ₹10 lakh for this session and students opting for the International Management Institute (IMI) in New Delhi will have to pay ₹15 lakh as the fee for the academic year. The fees include charges for the hostel, mess and the library apart from tuition fee.

Start with IIMs

“Charity begins at home; if the government is trying to stop the commercialisation of education by putting a fee cap on private PGDM institutions, they should start with the IIMs, which have been increasing the fees considerably. In some cases it is more than ₹19 lakh. These institutions have also received capital funding support from the government initially,” says former IIM-A Director Bakul Dholakia, who is currently the Director-General of IMI, New Delhi.

So, contrary to media reports, which stated that private business schools will have to comply with the new tuition fee regulations from the coming academic year, B-schools will continue to charge their existing tuition fees. In fact, some institutes, like TAPMI and IMI, have increased their fees for the coming academic session.

“There is no point speculating till the formal communication comes from the government. I would rather wait for the government notification,” says RC Natarajan, Director, TA Pai Management Institute (TAPMI). “While there have been media reports that the AICTE has accepted the recommendations of the Srikrishna Committee in toto, the decision needs to be taken by the MHRD,” he added.

Dholakia is awaiting a clarification from the AICTE as well. “AICTE has not issued any notification or circular for PGDM institutions. Also, the terminology used for a two-year management programme in the committee report is MBA courses, which is different from PGDM, the courses we as private institutions can offer,” says Dholakia.

“Thus, the clarification has to come from the regulating body and the question of changing the fees does not arise based on any assumptions,” he adds.

“We as institutions are trying to be at par with international business schools; many of us have applied for AASCB accreditation as well, and to achieve the same standards we need to spend much more on faculty pay, infrastructure and technology. A cap on fees will be a disaster wrapped in a regulatory framework,” says Harivansh Chaturvedi, Director of the Greater Noida-based Birla Institute of Management and Technology (BIMTECH) and president of the Education Promotion Society of India (EPSI).

No communication = confusion

Currently the admission process is on in full swing at most B-schools, and the latest reports about the fee cap have left students and parents confused. “The report has not consulted the industry or any private premier business school. At this time, when admissions are going on, such reports are creating a lot of confusion,” adds BIMTECH’s Chaturvedi.

Even as a formal communication is yet to be conveyed by AICTE, the fee cap issue has become a matter of serious concern for private B-schools, and they are gearing up to fight the recommendations.

The Indian Association of Autonomous Business Schools (IAABS) has also approached AICTE for a review but is yet to hear from the regulatory body.

“We are going to oppose the regulation if not put into practice fully and democratically,” says Chaturvedi.

Chaturvedi is hopeful that the law can help if talks fail. In the TMA Pai Foundation & Others vs State Of Karnataka & Others case of October 2002, the Supreme Court had mentioned in its judgment that private, self-financed institutions can decide their own fees, except they should not do profiteering, and charge capitation fees.

EPSI had also recently succeeded in getting a stay in the apex court for another year against the AICTE notification of December 28, 2010.

Cost over quality?

Most academic leaders are of the view that the government should not be concerned about the cost in an open economy, and there is no justification for regulating fees for PG courses.

“While basic education is a fundamental right, higher education is a matter of choice,” says TAPMI’s Natarajan. “Though you need regulation to take care of the public interest, governments should assume the role of quality assurance, and not try to regulate the cost it comes at, especially in an open economy.”

“We invest extra time and resources to provide our students with the best quality education and infrastructure, which comes at a cost,” he adds. “I agree management education is not affordable for everyone but for such individuals banks do provide education loans.”

If one is admitted at a premier institution, getting an education loan is not an issue because banks understand that the student will easily be able to pay back the loan after he/she graduates and gets a job, explains Natarajan.

If the private premium institutions are not sustainable when it comes to operating costs, industrialists may stop funding such institutions, says Chaturvedi. “Industrialists may stop investing in premium institution building in education if the government interferes in such a way,” he adds.

Even before a formal communication or a circular is yet to come from AICTE, the Srikrishna Committee report has generated adverse reactions. How this issue will unravel in the coming days remains to be seen.

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