MHRD mulling over curtailing MBA fee structure in private B-schools; spares high fee of IIMs

National level Fee Fixation Committee headed by Justice B N Srikrishna has submitted recommendations to Ministry of Human Resource Ddevelopment to curtail the MBA & other professional courses tuition fee charged by private institutes. The recommendations are proposing another blow instead of providing level playing field for Private B-schools with IIMs as the committee has refrained from recommending any fee reduction in IIMs.

To take stock of the situation and to address the issue of disparity of proposed fee structure between private B-schools offering quality MBA programmes and IIMs, Education Promotion Society for India (EPSI) a not for profit autonomous society with mandate from Universities and institutions as its members, has already issued circular letter EPSI/CIR-246/PGDM-51/2015dated November 19, 2015 among its members asking for their views and suggestions in this regard.

Following the directive from the Supreme Court of India not to allow the commercialization of technical education in the country, AICTE had set up the Justice Srikrishna committee to address the issue of high fee structure in private institutions.

The panel has recommended ceiling on fee structure for the Engineering, pharmacy, Architecture, computer application and MBA/PGDM courses in private institutes. The panel has classified the cities where these Private institutes are located as Tier-1, Tier-2 and Tier-3. The upper ceiling of fee structure is proposed to be fixed in accordance with their city location. The classification of cities is based on population. Big cities like Delhi, Mumbai, Bangalore, Hyderabad etc. are classified as Tier-1 cities.

AICTE Chairman Dr Anil Saharsabudhe has confirmed that the recommendations of National level Fee Fixation Committee have been received and have been forwarded to Ministry of Human Resource Development (MHRD) for further action. Following fee structure has been recommended by Justice Srikrishna committee for different technical courses offered by different tier private institutes.

Course
Tier 1 location
Tier 2 Location
Tier 3 Location

2 year MBA/PGDM
Rs.171,300
Rs. 163,400
Rs.157,800

2 year ME/M Tech
Rs.251,350
Rs. 239,950
Rs.231,350

MCA-3 years
Rs.171,150
Rs. 163,250
Rs.157,650

BE/BTech (4 years)
Rs.158,300
Rs.150, 500
Rs.144,900

B Pharma (4 years)
Rs. 155,225
Rs.147,250
Rs.141,650

B Arch(5 years)
Rs. 225,300
Rs.213,500
Rs.205,050

The recommendations put a tuition fee cap of Rs.1.71 lakhs for 2 year MBA programme offered by top rated private B-school and in case this B-school is located in tier -3 city, the proposed fee structure is 1.58 lakhs.

Location not Ranking: criteria for fee cap
Top rated private B schools like XLRI Jamshedpur, MDI Gurgaon, SPJIMR Mumbai, NMIMS Mumbai, IMI Delhi, IMT Ghaziabad, BIMTECH Greater Noida, TAPMI Manipal, XIMB Bhubaneshwar among others are the top rated B-schools that offer quality 2 year full time PGDM programmes.

The recommendations have allowed to charge 10 to 20 percent additional fee for Private institutes with excellence like XLRI. In case the recommendations of Justice Srikrishna committee are implemented their fee structure will get reduced by 5 to 12 lakhs, even after allowing for this exception to them. No private B-school has a current fee structure below Rs.7 lakhs.

IIMs spared
Every time when it comes to provide level playing field to Private B-schools at par with IIMs, MHRD gives jolts and blows to PGDM B-schools. The IIM Bill 2015 also proposes to give authority to IIMs to award MBA degree to students instead of current PGDM diploma. However, there is no mention of even any top rated Private B-school who has also been considered to award such degree.

Now when there is a proposal to curtail fee structure for MBA/PGDM programmes, again the private B-schools have been targeted although it is a fact that IIMs have a higher fee structure than top rated private B-schools. But there is no recommendation to reduce the fee structure of IIMs.

All the 3 top rated IIMs charge fee between 18 to 20 lakhs and the fee to pursue MBA from top private B-school is between 7 to 14 lakhs.
Whether MHRD will be able to provide level playing field to private B-schools or proposes to close them as it may be difficult for them to sustain without being offered a substantial subsidy to survive is yet to be seen.

Stay tuned to MBAUniverse.com for more updates on MBA fee in private B schools