According to Ajit Balakrishnan, chairman of the board of governors of IIM-C, "Most students who study in IIM-C come from families whose annual income is Rs 5 lakh. We are a public higher education institute funded by taxpayers' money. Hiking our fees just because IIM-Ahmedabad or IIM-Bangalore has hiked theirs will make IIM-C an opportunist."

"We are awaiting the recommendations of the IIM review committee, which will explain the process for arriving at the fees," Balakrishnan pointed out.

According to Balakrishnan, an IIM-C alumnus and founder chairman of Rediff.com India, "Any further fee hike by IIM-C, if at all, would be done in a civilised way, after consulting all the stakeholders, including students and their parents."

There was a human angle too: "It is very important that we do not scare off talented students as most come from a middle-class background," said Balakrishnan.

The post-graduate programme of IIM-C rakes in one-third of IIM-C's revenues, so raising the fee a bit will not affect the institution much, Balakrishnan said.

The economics behind the move was highlighted by Dinesh Varma, chief administrative officer of IIM-C. "We calculated our income and expenditure and realised that we don't need to hike our fee in order to meet expenditures," reasoned Varma.

"Our biggest expenditure every year is towards employee salaries. On an average, we need around Rs 20 crore per year to run the institute," Varma added.

IIM-C's income, in part, came from post-graduate programmes (Rs 12 crore), management development programmes (Rs 10 crore), and the one-year residential executive MBA programme (Rs 3.04 crore). Alumni support and donations supplemented its corpus every year.

To be fair, the IIM-C infrastructure development budget could lead to demands on its financial resources, as over the next three years, it intended to invest Rs 100 crore from its corpus of Rs 150 crore to remodel its campus and make room for 25 per cent more students on an international look venue.

Students taking admission in 2008 were asked to shell out Rs 3 lakh in the first year and Rs 4 lakh in the second year. Students taking admission in 2009 had to pay Rs 4 lakh in the first year and the same amount in the second year.

Unlike the IIM-A and IIM-B, IIM-C decided not to pursue a fee hike till the IIM Review Committee submitted its report in May-June this year.

The IIM Review Committee was headed by former Maruti Udyog [Get Quote] chairman R C Bhargava.

IIM-C also decided at its board meeting ahead of its convocation on April 5 to keep on hold an earlier decision to hike the course fees for its core two-year post graduate programme.