Vijaypat Singhania, the chairman of the governing council of IIM-Ahmedabad who met Minister of Human Resource Development Arjun Singh, justified the fee hike and said they would take steps to ensure that all deserving students get into the premier institution.

"I met the minister as he was concerned about the fee hike. I explained him at length as why we had to go for such a move. The hike is purely on the basis of costs and in the wake of the Sixth Pay Commission report. I think the minister was satisfied with our point," Singhania told reporters after meeting Arjun Singh at his residence. "The new fee structure would remain the same," he said.

Singhania told that the minister was concerned about the poor students who may not be able afford the new fees. "But we have pledged to increase the scholarships which was about Rs 40 lakh in IIM-A last year to about Rs 8.5 crore (Rs 85 million) in the coming academic year. This should benefit about 62 per cent of the students," he said.

"We are in talks with some banks like SBI and ICICI on these scholarships and we can see a positive response from them to associate with us," he said.

Singhania also said that IIM-A has increased the threshold of the maximum household income to Rs 6 lakh from Rs 2 lakh to make more students avail of the scholarships.

The scholarships are proposed to be of six grades. "Moreover, the student has to pay only the net fee during the admissions and can pay the remaining later, after availing of the scholarship," he said.

The chairman also added that their students are performing extremely well with salary packages ranging up to more than Rs 1 crore per year. The amount spent on each student at IIM-A is about Rs 5.5 lakh per annum, he said.

Singhania maintained that their intention is not to make profits. "We don't want to turn IIMs into profiteering institutions but if the costs are increasing, fees would have to be increased. Anyway, in comparison, private institutions are charging more than us," he said.

IIM-A raises fee almost three times