Photo Courtesy: Mikecogh (Flickr)

The Indian Institute of Management Lucknow (IIM-L) announced yesterday that it had reduced fees. Great news, the media lapped it up and so also the MBA fraternity. But it also added, to this feat, that it was the first IIM to do so. Kind of right but not quite. IIM Kozhikode had reduced fees two years ago and then claimed to be the first IIM to do it.

While the ‘real first’ is possibly the last thing on the mind of MBA hopefuls, or MBA students, the ‘badge’ acquired a touchy tone, in the hours that followed the IIM-L announcement. Both IIM-K and IIM-L went all out to prove themselves as the real first. And by the end of 24 hours, the matter had boiled down to simple technicalities, with neither of the parties acknowledging that whether now or two years ago, reducing fees is a bold move and should be applauded anyway.

To begin with, IIM-K director Prof Debashis Chatterjee was taken aback by IIM-L’s claim of being the ‘first’ IIM to reduce fees. “Yes, we did reduce the fees two years back. Everyone knows it,” was his straightforward stance.

To which IIM-L had a ready counter. “Yes, IIM-K announced reduction of fees two years ago but we are still the first,” said a spokesperson from IIM-L. She explained. “IIM-K cannot take credit for reducing fees since it receives government grant. What is the big thing if it reduces fees after getting government money? It does not really make a difference to its functioning. IIM-L, on the other hand gets no government funding. We have done it entirely on our own strength.”

To top that IIM-L also pushed the point IIM-K had reduced fees by a mere Rs 30,000 but “we have reduced it by Rs 1, 20,000 which is a huge figure. If you are anyway paying for your education via a loan, does Rs 30,000 make a difference? No, but a reduction from the current Rs 12 lakh to Rs 10.8 lakh is a big thing. Besides, we have not increased fees since 2011,” was how IIM-L spokesperson reasoned.

IIM-L’s director Prof Devi Singh, apparently had cherished a dream two years ago to cut fees and introduce new programmes but that never happened because expenditures never declined. “But today, we are secure and we can afford to take a cut in fees. We have the money to start new projects and also charge the fees we want. We do not need government help,” the spokesperson added.

She further explicated that Prof Devi Singh also wanted to make sure that an IIM is within the reach of every MBA-hopeful, irrespective of his/her economic background. “Yes, the IIMs do give scholarships but we all know how much they really help. And Prof Devi Singh has studied the demographics of those who take CAT. His found out that most candidates come from a class that is forced to take a loan and study. This move by IIM-L is to make life a little easier for them.”

When Prof Chatterjee was told of IIM-L’s reasoning, he said. “I can only laugh this out.”

Indeed, it is an episode worth laughing at. Who did it first will remain an argument for the next two days and then forgotten, be it Rs 30,000 or Rs 1, 20,000. Of course, a cutback of fees of Rs 1 lakh is a sizeable sum and will make a difference. Moe so, considering that many of the top IIMs have increased fees this year and some others in the last few years. Today, the fee for the same programme at IIM Bangalore is Rs. 17 lakh and at IIM Ahmedabad it is Rs. 16.6 lakhs.

A fee of Rs 17 lakhs and above (without adding other living and travelling expenses) is a tall order especially in the current economic scenario when placements have not kept pace with student-expectations.

The fact is that whether IIM-K did it two years ago and IIM-L did it this year, that b-schools are actually keeping the student in mind is credit-worthy. Whatever be the reasoning to increase fees, (be it infrastructure or new programmes) the onus is always transferred on to the students. It is they who have to battle out with education loan companies for sureties. And education loan rates have been on a steady rise last few years.

Furthermore, one always hears of parents paying for higher education with their provident fund or putting at stake their life savings. A gesture such as IIM-L and IIM-K’s comes as a breath of fresh air. Whether with government grant or not, is of little concern, that some schools have the guts to stick their necks out is a treat by itself.

Prof Devi Singh’s long term plans reason that with low fees will come genuine and good students and this in turn will attract better faculty and help the b-school to grow at all levels.

True, b-schools can spat over other things like faculty, pedagogy or simply infrastructure, rather than who announced a fee reduction first. Hopefully, other schools will take cue and instead of taking the easier route out of increasing fees, actually take a step back and reduce them. This might, in the long run, actually mean many steps ahead for the b-school and MBA education at large.