IIT fee hike reduces their revenue!

Tuition fee in IIT was hiked to 2 lakh per year, few months back. Along with other expenses, it amounts to around 10 lakh for a 4 year programme and 13 lakh for a 5 year programme.

I had written two pieces arguing against the hike (here and here). The main reason being, all the assumptions and rationale behind the fee hike don't stand the test of empirical reality. They are more rooted in biases than empirics. Further, the effects of such hike will be disastrous to say the least. It's also unfortunate that a government that promised to increase spending on education to 6% of GDP finds it difficult to bear few hundred crores. It isn't a case with IITs alone. Even CSIR's budget is cut to half.

The latest update is that revenue has decreased after the fee hike because there's a surge in number of students claiming exemptions. Given the costs of the course, it shouldn't be a surprise. Apparently, IITs are trying to get school history of students to cross check the claims. It may not be helpful because parents often risk and invest all their money in  coaching. It isn't a reflection of their economic status. It's rather a reflection of their urge. The calculations are only going to get messier.

Government should at least realize now and revoke the hike. The cost is neither a grave threat to fiscal deficit nor does it have any rationale. In fact, even if we assume that the hike is revoked, the total investment will be much less than what it's supposed to be.

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