The hikes were announced on Tuesday following a board of governors’ meeting at the institute. IIM-C director Shekhar Chaudhuri said: “Costs have risen and are expected to increase even further once the Sixth Pay Commission recommendations are implemented, which will increase all salaries at the institute.”

He added: “The decision was also taken keeping in view the fee increase at IIM-Ahmedabad, IIM-Bangalore and other institutes.” IIM-Bangalore, in fact, has increased annual fees for first-year students to Rs 3.5 lakh.

Moreover, IIM-C incurs a deficit of Rs 1.5 lakh on every student each year. “The cost of teaching and hostel facilities, together with other privileges for students, amount to a staggering Rs 3.5 lakh every year. The fee increase will help us meet growing expenditures, while providing students better opportunities and improved facilities,” said IIM-C chief administrative officer Dinesh Verma.

The fee hike will also allow Eastern India’s premier business school more freedom, while making budgetary allocations and make it more self-sufficient.

IIM-C has also brought about a change in the need-based scholarship scheme. So far, students from households with annual incomes of up to Rs 2 lakh were eligible for scholarships offered by the institute. From this year, the eligibility margin has been increased to Rs 4 lakh.

“There are at least 25-30 students whose fee was waived every year. The new scheme will encourage more students from financially weak backgrounds to seek admission,” added Shekhar Chaudhuri.