The premier management institute, Indian Institute of Management-Bangalore, is in a bind. It had asked for Rs 114 crore (Rs 1.14 billion) to build infrastructure to accommodate additional students under the OBC quota.

However, the Centre has sanctioned only Rs 33 crore (Rs 330 million). IIM-Calcutta, too, had asked for around Rs 200 crore (Rs 2 billion). It's awaiting a response.

Moreover, since the funding will come to IIM-Bangalore in phases over five years, this could seriously affect its plans for more classrooms, hostels and upgradation of IT infrastructure, according to IIM-B director Pankaj Chandra.

"For the last three years, we had not asked the government for a single paisa. Since we can't wait for government funds to reach us, we are initiating expansion plans from our internal funds earmarked in the annual budget," Chandra told Business Standard.

Chandra explained that the implementation of the 27 per cent OBC quota would result in a 54 per cent increase in the number of seats for the flagship two-year Post Graduate Programme in Management. The number of seats will increase by 130 over the next three years to reach 340 seats in the next three years.