Government withdraws IIM fee cut order

By Our Economy Bureau | 30 Jun 2004

New Delhi: The government decided to withdraw the NDA government''s directive calling for a major cut in fees of the Indian Institutes of Management (IIM).

After meeting the IIM chairmen and directors, the union human resource development (HRD) minister, Arjun Singh, said that while the institutes would continue charging their earlier level of fees, they would ensure that no student faced any difficulty for want of financial resources.

"All students whose annual gross family income is Rs 2 lakh and below, will be eligible for receiving financial assistance apart from a full tuition fee waiver,'''' Singh told reporters in a conference.

Beside the tuition fee waiver, he said the institutes would also consider, in appropriate cases, waiving hostel and mess charges. ``All institutes will give active assistance and support to all other students who need to obtain bank loans,'''' Singh said.

The HRD ministry will assist three IIMs - those at Indore, Kozhikode and Lucknow — to the extent of additional burden they have to bear due to waiving off the tuition fees. The three financially better-off IIMs at Ahmedabad, Kolkata and Bangalore, have made provisions from their internal resources for the need-based assistance.

Singh said it was unfortunate that there was a "breakdown in communication" between the government and the IIMs. "The records also suggest that the finance ministry or the internal finance division of the HRD ministry were not consulted before the reduction of fees. The decision of the ministry to fix the fees, unfortunately, seems to be not in consistence with the laid down provisions or procedures of the government. Therefore, the order dated 5.2.2004 needs to be withdrawn," he added.

Through the February 5 order, the previous HRD minister Murli Manohar Joshi had sought to reduce the fee from around Rs 1.5 lakh per annum to Rs 30,000, leading to a Government confrontation with the IIMs, which moved the Supreme Court.