"The hike was indeed necessary because the freeships are now weakening the institute by putting a burden on its corpus fund," Vijaypat Singhania, chairman, IIM-A told media after an hour-long meeting with HRD Minister Arjun Singh.

Replying to media, he said, "No, it remains the same".

"The Minister was concerned about the meritorious poor students who will not be able to afford the burden of fee-hike," Singhania said adding IIM-A has decided to increase the scholarship manifold.

As against Rs 40 lakh earmarked earlier for scholarship, the amount would be raised to Rs 8.5 crore. This will cover 62 per cent of the total students of the institute.

However, Arjun Singh refused to speak to the media on the issue after the meeting.

Last week, IIM-A increased its fees- from Rs 5 lakh.to Rs 11 lakh for the two-year course.

"The fee-hike is not to make profit. The cost of the course has to be met. Our students get into jobs immediately with an annual package of Rs 25 lakh and sometimes more than that," Singhania said pointing towards the fee-hike

There are proposals from public sector banks like State Bank of India and the ICICI Bank to support students with soft education loans.

Singhania added, "the students will be able to repay the loan before leaving the institute because employers are ready to meet the cost of their education. Most of the employers are repaying the loan taken by the students",

The institute will support the students at the initial stage through a graded system. And students family income will also be assessed through a graded system.

As soon as they will apply for admission in the institute they would be entitled to get a scholarship.

There will be different slabs like from 2 lakh to 5 lakh and then 6 to 8 lakh and so on. These slabs would fetch the students a major portion of scholarship if they fit into the criteria.

Earlier, the students used to apply in the institute and after admission they were considered for scholarship.

Singhania said the institute has decided to enhance the fee keeping in mind the Pay Commission's recommendations.