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All the Indian Institutes of Management (IIMs) have always been the epitome of management studies. With their alumni leading global multinationals and bringing revolutionary change to corporate India, IIMs are only getting bigger. But with their phenomenal reputation comes a price tag to match that students need to pay. The applicant to an MBA program often asks, "Why are IIMs so costly?". To have a knowledge of the fee structure and what these expenses include may at times be very difficult to comprehend. But that someone is aware of these nuances helps students view things beyond the numbers and acknowledge the actual value of an IIM MBA. Let us  dissect all this and discover Why IIMs cost so much and is an IIM MBA worthwhile.

So let us discover where all the money is going.

A Snapshot of IIM Fees: What Are We Talking About?

Let us initially see the fee structure of some of India's top IIMs. Knowing the tier of IIMs in India and hence the difference in fee charged on the basis of that is vital. Here below is a table indicating the fee of different IIMs for the course of MBA:

The Old IIMs charge the maximum fees due to their inception, well-established infrastructure, and widespread alumni base.

The New IIMs do charge competitive fees because they are attempting to match the level of their older counterparts. But in the days to come, the New IIMs, at least the better of this breed will match the older IIMs.

The baby IIMs are also known as the third generation IIMs and are newest in the club. These institutes are still finding their path to become a legend. It will take another couple of years for that. However, when it comes to faculties and infrastructure, they have not left any stone unturned and are growing at a rampant pace.

Breaking Down the IIM Fees Structure

The IIMs are not paying merely for the classroom instructions, and thus has a lot of reasons attached to them. They encompass a broad range of services and facilities, and thus the total amount is more. Here is a bit-by-bit explanation of where your money is being utilized:

1. Academic Costs: The Center of Learning

Most of the fees are utilized for various academic costs, which include the following:

Faculty Salaries: IIMs can afford to recruit the best brains from the academic fraternity. Almost all of them have done their PhDs from top world-class institutions. Thus, providing competitive salaries ensures best-in-class teaching and research leading to further growth of the institute.

Curriculum Development: Periodic upgradation to keep pace with global trends & requirements is likely to require various inputs and liaison with experts across the globe.

Learning Materials: IIMs provide access to some high-end case studies from schools like Harvard Business School. They provide decent quality textbooks and subscription to many business journals whose cost goes up to lacs. 

They make sure that students are offered top-class education and never fall behind and are up-to-date with the applicability in the real world.

2. Infrastructure and Facilities

The newly established campuses of IIMs are nicely equipped with top-class infrastructure without any doubt, which are not cheap. This is definitely one of the causes why IIMs are too costly. Now let's get deeper into it:

Smart Classrooms: With smart & sophisticated classrooms, simulations and other software tools are platform for interactive learning. So these are essential in these institutions.

Libraries: Significant repositories of books, journals and online databases like JSTOR and EBSCO are provided 24/7. The days when only traditional libraries were available are behind us. You can now utilize these databases across the country at your convenience.

Technology Infrastructure: Internet and learning management system access also involve tremendous costs. Campus-based technology integration is required to ensure seamless learning.

These hi-tech facilities compel students to have everything they require to excel academically and professionally. Since these facilities are also needed for placements, these become a must.

3. Hostel and Living Costs

Almost all IIMs degrees are residential programmes. In other words, students live on campus during their programme. Thus, they are also paying for these hi-tech facilities. The charges cover:

Accommodation Charges: Modern hostels with single or shared rooms, maintenance, and utility charges like water and electricity. All of the IIMs have ACs also which becomes a part of the cost.

Mess and Dining: Three to four meals a day, snacks, and prevalence of healthy foods. Even though these are highly subsidized and kept very reasonably priced for the students yet they become part of the over expenses.

Campus Infrastructure: As already discussed, as IIMs provide residence courses, there are certain recreational amenities that students and faculty must have. These include but are not limited to Gyms, sports facilities, common rooms and cultural rooms to create a campus life.

Living in the campus with all these facilities contributes to peer learning as well as networking. And, we all know how important peer-to-peer learning in an MBA, especially from an IIM.

4. Global Exposure and Industry Connect

IIMs take great pride in their industry-oriented curriculum and global connections:

Industry Collaborations: A number of events like live projects, internships and industry conclaves are conducted all year round. Hence, these allow the students to link theory with practicalities.

Global Immersions: Many IIMs also have exchange programs or global immersion on board for students. Although these are merit-based and students pay for it but there are some admin fees which are retained by the IIMs for these arrangements.

These are totally priceless. But they have travel expenses, stay and other program management fees. So, all these contribute to your answer of how IIMs are so costly.

5. Alumni Network and Branding

why IIMs are so costly – one among the reasons can be the ever-lasting branding. An IIM MBA doesn't end with graduation. Rather it starts for a lifetime membership to a crème de la crème community which the students gain during these 2 years. The charges also account for the following:

Alumni Interaction: Multiple events, mentorship programs and activities to make contacts for professional growth with alumni. These typically result in spending lacs for these but are invaluable for placements and career opportunities.

Brand Management: Maintaining the IIM brand worth while keeping global brand recognition through accreditations (AACSB, EQUIS) and rankings.These also incur a cost which is typically neglected or are not seen at the top.

The value of belonging to IIM alumni network is invaluable. So, it is absolutely crucial because it tends to bring opportunities to one's doorsteps which are worth investing in.

6. Subsidies and Financial Independence

It is also important to note here that even though IIMs are highly expensive, they are not granted any direct government subsidy of funds like other IITs or NITs. Both institutes operate individually as an independent organization. They fund their operations by collecting tuition, grants and donations from alumni. Therefore, the fee maintains IIMs' autonomy with quality education.

why IIMs are so costly? Is the ROI Worth It?

To all students, the high charges of these IIMs raise questions about return on investment (ROI). But the statistics are self-explanatory which require no testimony. Graduates of IIMs always receive some of the best pay packages in the country. The mean packages here are anywhere from ₹20–35 LPA and foreign offers easily breach ₹1 crore. Below is a quick look at the mean placement packages of top IIMs:

Therefore, in a span of two years after graduation, most students repay their costs early, making the most of it. Hence, the IIM MBA is not just an expense but an investment in their future.

Scholarships and Financial Aid

To make the course accessible to students from various backgrounds, IIMs offer various scholarships and schemes of financial aid:

Need-Based Scholarships: Economically disadvantaged sections of students may avail these after submitting enough proofs.

Merit-Based Scholarships: For scholars of high academic achievement or CAT scores/composite scores are given these scholarships.

Corporate Sponsorships: Many companies have the tendency to give sponsorship to their employees pursuing MBAs. Thus, try to find out if your company is capable of sponsoring your MBA.

Educational Loans: With tie-ups with all the leading banks, IIMs ensure that students can avail loans at preferential rates and tenure. Thus, these efforts demonstrate the commitment of the institute towards inclusivity, ensuring that financial limitations do not deter worthy candidates.

India's top IIMs, which had been synonymous for years with postgraduate management education alone, are joining the battle with undergraduate degrees. This blending of academic vision and financial sense has brought about questions about whether it is a visionary move or a deficit-covering exercise

The Indian Institutes of Management (IIMs), which have long been associated with high-end postgraduate management education, have set aside conventional practice to launch standalone undergraduate degrees.

This shift is being driven by double impulses: a bold desire for multidisciplinary education on the National Education Policy (NEP) 2020 and fiscal compulsions of dwindling governmental aid.

IIMs Bangalore, Sirmaur, Kozhikode, and Sambalpur justify their fresh four-year UG programmes as an institutional pledge towards raising critical thinking and socially conscious leaders from an early age.

IIM Sirmaur launched its Bachelor in Management Studies (BMS) in 2024, IIM Bangalore will launch a BSc (Hons) in Data Science and Economics from 2026, IIM Kozhikode will launch its BMS (Honours with Research) from 2025, and IIM Sambalpur has launched two Bachelors of Science in 2025, one in Management & Public Policy and another in Data Science & Artificial Intelligence.

The design reflects NEP's emphasis on multidisciplinary, practice-directed learning.

It also fits well in the fast-changing work market with the integration of AI usage and AI agents replacing the activities of human personnel. There is a need for more monitoring by humans who are management trained and can observe not just humans but also AI agents.

As Infosys Co-founder Narayana Murthy noted earlier this year, the traditional difference between management and technology is a myth. Professionals need to combine strategic and technical skills.

Waiting until the postgraduate stage of studies to learn these skills is no longer possible; the students need it as soon as possible.

This philosophy is reflected in the IIM UG programmes, which integrate liberal arts, social sciences, data science, and experiential labs to produce hybrid thinkers who are capable of bridging strategy and action.

Institutes claim that these costs are balanced by their commitment to scholarship, merit-cum-means aid, and economically weaker section quotas.

Admissions are on competitive national-level exams and interview, with explicit eligibility standards fixed against government guidelines.

HOW DO UG COURSES IMPACT THE IIM BRAND?

Partisans view the move towards including UG courses in IIMs as an opportunity to introduce the mythical IIM rigour and contacts to young students, promising them the same quality and placement depth which define their experienced PG programs.

But like critics caution, rapid diversification into UG segments has the risk of weakening the specialized, business-school oriented brand building which has created IIM cachet over several decades.

"IIM Kozhikode undergraduate education is not a matter of filling fiscal gaps but of filling intellectual ones. Our Bachelor of Management Studies takes off on the vision of the NEP 2020, combining research orientation, inter-disciplinary learning, and global exposure to future-ready the young minds as leaders," informs Professor Debashis Chatterjee, Director, IIM Kozhikode.

"Rather than watering down the IIM brand, this growth strengthens it by increasing reach, offering accessibility through scholarships, and shaping leaders able to manage complexity with competence and conscience," he further adds.

 This shift has automatically given a monetary support to their aggressive roll-out of academic programs.

In IIM Sambalpur, Director Professor Mahadeo Jaiswal claims that introducing undergraduate programs is "not a question of money but of vision and opportunity."

The institute launched two four-year Bachelor of Science programs in 2025 one in Artificial Intelligence and Data Science, and one in Public Policy and Management.

"Student response to IIM Sambalpur's undergraduate programs has been extremely encouraging," said Professor Jaiswal. "We have got tremendous interest from candidates all over India, with students from multiple academic backgrounds applying to build a strong foundation in management, policy, and data-driven problem-solving right after school."

He said that the first cycle of admissions to 2025 has been extremely promising, with the volume of applications well above projections.

The IIM Sambalpur programmes place emphasis on developing talent with critical thinking, problem-solving, and entrepreneurial skills right from the outset, in synchronism with NEP's focus on flexible and multidisciplinary learning.

He also said that the programs aim to instill problem-solving, critical thinking, and entrepreneurial competencies in students right from the start since NEP has been looking for flexibility as well as multi-disciplinary learning.

Professor Debashis Chatterjee presented the following details about the BMS program at IIM Kozhikode:

Motivation: The launch is educationally driven, to create leaders from a lower stage, and skill-based and not revenue-driven.

The graduates would thus enjoy new opportunities through industry internships, international exchanges, and direct access to alumni networks, providing them with the edge in employment as well as studies.

CENTRALITY OR SUPPLEMENT?

With fluctuating budgets and rising undergraduate demand, such new programs will become lifelines to scale up from add-on revenue drivers to strategic pillars of institutional growth.

Directors in some of the IIMs confirm that UG programs will rise with specialized professors and facilities, and admissions are also likely to improve year by year.

The IIM undergraduate jump is at the juncture of vision and necessity. While reduced government funding has pushed these premier institutes to diversify revenues, the change indicates a genuine intent to design a new generation of socially conscious, multidisciplinary managers.

While Murthy's vision and the directors' statements suggest, the future belongs to hybrid minds that can walk the what of management and the how of technology.

Whether IIMs' undergraduate courses are a revolutionary pillar of Indian higher education or a strategic experiment will hinge on finding a balance between access, affordability, and the unflinching quality that has been the hallmark of their brand.

The Modi government announced their plan to open new IIMs and IITs in all states. Although there are hardly anybody who have expressed their objection, there are numerous people waiting eagerly for this concept. This article explores its implications.

Alerting parliament's joint sitting, Honorary President Pranab Mukherjee announced that the government will establish IITs and IIMs in every state. "We will open IITs and IIMs in all states." the president announced in his address.

An IIM and an IIT in all states, what would be the effects? While hardly anyone has protested against the issue, there are many who are thrilled with the thought.

The existing Government had also made the same promise at the time of election and has therefore brought forward its poll promise by putting the same in the speech of the President. Prime Minister Narendra modi had already said that, "Education and opportunity for jobs for youngsters; IIMs, IITs & AIMS in every state is one of the 8 Point Development Model of our government.".

As the reports show, the government would like to initiate such an expansion in haste and HRD minister Smriti Irani has already put demands of infrastructure for new IIMs and IITs on the agenda of her meeting with state secretaries of higher and technical education on June 17.

Let us consider the present situation of our IIMs and IITs as a whole before tallying the strengths or weaknesses of this gigantic expansion plan.

Indian Institute of Management – IIM : Current Scenario

In the existing 13 IIM's there are 3335 seats.

As there is one IIM in every state, it will be 29 IIMs overall. 16 new IIMs will bring at least 1920 seats (assuming a batch of 120). So the overall IIM quota seats would be 5255. 27% of the total seats will be for OBC's, 15% for SC's and 7.5% seats are reserved for ST category and so it will create 49.5% overall. Thus the general category now shall have 2653 seats available with them, which is a gigantic boost from 1684 seats previously.

The New IIMs are now in the proposed phases of opening in J&K, Goa, Himachal Pradesh, Punjab, Maharashtra, Seemandhra, Telangana, Delhi, Odisha and north-eastern states except Meghalaya.

Indian Institute of Technology – IIT : Current Scenario

 In 16 IITs there are total seats of 8862. Though ISM Dhanbad is also generally included in IITs and there are total seats of 1023 and total becomes 9885 seats. Out of them in general category 4,844 seats.

New IITs are proposed to rise now in states of J&K, Haryana, Seemandhra, Goa, Karnataka, Kerala, Chhattisgarh and north-eastern states. Whether all north-eastern states will have an IIT or they are being consolidated is yet to be known.

Advantages of establishing New IIMs and IITs

- Establishing new universities of higher learning, the increase in the seats is certainly a piece of good news for future management and technical graduates who would wish to establish their career in the area of management and technology.

- Even though they possess the greatest number of young minds, admission of students into premier institutions like IIMs and IITs is restricted due to non-availability of suitable seats. Increase in seats will enable such clever minds to achieve their dream.

- With the construction of new institutes, a considerable investment will be done in each state and hence local economy will boost. The standard of not only higher but primary education too will get enhanced, as more individuals will be ready to take advantage of better education provided.

- The majority of the students need to change from one state to another for gaining quality education. Opening these quality schools in all the states will be advantageous for the progress of each state because the migration will be reduced. Further, the industries will seek more local talent than some excellent foreign colleges' talent or other states' talent, that will enable them to hire better and motivated workers who will work harder.

- And, the issue of accessing local talent will address most of the HR problems and industries will be able to capitalize on it in numerous ways from establishing industries to expanding business in the preferred state and location.

- The feeling of competition will rise and will only thrive. So, it would be a win-win for all, local, state and the country altogether. So the entire socio-economic scenario will alter.

Few areas of concern

Although the dream is great but there are going to be some hurdles before the new government to make this dream of an IIM and an IIT in every state possible. Some areas of concern are:

- The newly formed IIMs are already incurring losses owing to the absence of proper infrastructure and qualified staff. The government needs to be cautious while setting up such institutions. It needs to ensure that whatever institutions are set up, they are in a position to deliver quality education to the largest number of students.

- Government should first attempt to expand the existing capacity of the existing IIMs and IITs by filling seats and faculty instead of opening new one. Indian IIMs and IITs have failed to raise their intake capacity compared to other Top Institute in the world. Government should start to enhance the depth of these Institutions instead of breadth.

- While setting up an IIT would, on average, require Rs 1,750 crore, setting up an IIM and central university would require Rs 1,000 crore each. This doesn't include the expense of land that state governments will have to purchase and gift to the center for free. Narendra Modi government will be forced to go for this expansion phase wise, one or two states at a time, instead of one state at a time.

- Government has proposed his homework prior to designing this colossal expansion. Building infrastructure, faculty and primary-secondary education quality need to be addressed for the success of this venture.

- No developed infrastructure, and few Quality permanent faculties are two of the greatest stumbling blocks to this cause. The government and the HRD Ministry must prioritize this problem so that they may enjoy the fruits of their future schemes.

Whatever may be the issues, imparting quality education to more sections of society is the need of the hour for India. Being a developing country and to facilitate this development, a balanced growth in the output of well-educated and highly qualified people is just inevitable.

So the wait will be interesting to watch the next move towards this initiative by the Narendra Modi government and the HRD Ministry. Students otherwise will rejoice as the scope of learning from the top-most institution of technology and management will increase.