The Indian Institute ofManagement-Ahmedabad (IIM-A) on Sunday increased the fee of its flagship PostGraduate Programme from Rs 11.5lakh to Rs 12.5 lakh annually, citing rising cost of teaching.

It had increased the fee from Rs 5 lakh to Rs 11.5 lakh in2008. ''The hike will be applicable to the batch of 2009-11. Students will haveto pay Rs 6 lakh for the first year and Rs 6.5 lakh in the second year. Theinstitute is continuing the subsidy scheme but may introduce minor changes,''said director Samir Barua after the meeting of the board of governors onSunday.

IIM-Calcutta, too, more than doubled its fee in February, toRs 9 lakh for students joining the institute this year. The fee forIIM-Bangalore is Rs 9.5 lakh. There's a proposal to increase the fee from Rs 5lakh to about Rs 7 lakh at IIM-Lucknow.

The increase in fee comes at a time when IIM-A is atloggerheads with the Centre over attempts to curtail its autonomy. The decisionwas taken by the board of governors. IIM-A has been fighting a tug-of-war withthe central HRD ministers since 2004, first over fee hike with Murli ManoharJoshi when the NDA was in power and then with Arjun Singh over OBC quota whenthe UPA came to power.

''Although, the Central government members on our boardweren't present during the meeting, we had sent them the agenda in advance,''Barua said. ''I have not received any objection to the hike so far.''

Management Development Programmes, the main source of incomefor IIMs, have seen a huge downturn in the second half of the academic year of2008-09. The placement fee charged from companies participating in campusplacements has also come down.

Barua said, ''By the time the 2009 batch passes out in 2011,recession is expected to fade out and students will get competitive jobs, withwhich it will not be difficulty for them to pay their loans. Also, incomparison to other business schools in the country, this fee is not veryhigh.''

The hike is also seen as an attempt by the institute toreplenish its depleting corpus. Barua said the corpus was Rs 130 crore tillconstruction of the new campus began. ''Now we are left with Rs 50 crore,'' hesaid.