"Based on the average compensation packages offered for placement within the country, the pay back period even at a fee level of Rs 5.5 lakh would be just four months," the IIMA said in a recent communication.

The efforts of IIMA to defend its steep hike in the fee structure comes in the backdrop of a Parliamentary panel taking exception to the fee hike and suggested that the IIMs should wait for the report of the Bhargava committee, set up to review functioning of the Institutes.

However, to ensure that non-availability of funds did not come in the way of poor students seeking to pursue the two year post graduate programme, the IIMA said it would become the first institute in the world to offer MBA programme at zero cost to poor students.

Under the unique arrangement, students who belong to families with annual income levels of upto Rs one lakh, could complete the two-year post graduate programme beginning next month.

The fee would vary from Nil for a student from family with annual income of upto Rs one lakh to Rs 5.5 lakh for a student from a family having an income of Rs six lakh and more.

"About 22 students from the batch starting June 2008 are expected to benefit from this unique arrangement," the IIM-A said.

Based on the income data for the incoming batch, the average fee per student is estimated to be about Rs 3.80 lakh and the total fee waiver or subsidy is likely to be over Rs 4.50 crore for the year, it said.

The ceiling on income to identify low income families for financial support as specified by the government is annual family income of Rs 2.5 lakh. The minimum fee to be charged from students from families with annual income between Rs one lakh and Rs 2.5 lakh would be Rs one lakh, while the maximum fee in this category would be Rs 2.6 lakh.

These students would be eligible to apply for need based scholarships to be provided by the Institute, the B-school said, adding over 20 per cent of students who have been offered admission are expected to benefit.

Asserting that funding would not be an issue, the Institute said it has received full funding proposals from several banks so that the assistance is within the reach of all students who have been offered admission.

"The Board of Governors of IIMA has taken a decision that it would ensure that no student who has received an offer of admission is unable to go through the programme because of non-availability of funds", it said.