CAT on Nov 16; IIMs set to be richer by Rs 23 crore

Despite an unfolding global economic crisis, uncertainties about the pay-packets to be offered in the next placement season and the RC Bhargava Committee recommending a regulator to curtail their ‘autonomy’, at least one thing is clear to the seven Indian Institutes of Management (IIMs): the November 16 Common Admission Test (CAT) will make them richer by around Rs 23crore.

The seven IIMs in Ahmedabad, Bangalore, Kolkata, Lucknow, Kozhikode, Indore and Shillong could together make this profit from merely selling application forms, up from Rs 18 crore last year, thanks to an increase in the price of application forms sold in August this year, IIM sources told Business Line.

Last year, nearly 2.20 lakh students had appeared in the CAT and about 2,000 of them were finally selected. CAT is conducted by each of the seven IIMs in rotation to shortlist candidates for admission to the two-year postgraduate business management programmes these B-Schools run. This year, nearly 2.50 lakh students are expected to take this examination.

This examination is conducted at two dozen centres across India by the CAT Group, a body comprising admission committee chairpersons of each of the IIMs.

This year, it increased the cost of examination application forms for general category candidates by Rs 200—from Rs 1,100 to Rs 1,300 — and for those belonging to the scheduled castes (SCs) and scheduled tribes (STs) by Rs100 — from Rs 550 to Rs 650. The total earning by sale of these forms this year is expected to be nearly Rs 30 crore, as against Rs 24.2 crore last year.

On the other hand, the total expenses are said to have increased from Rs 6.2 crore in 2007 to Rs 7 crore now. Thus, the profit is likely to be nearly Rs 23 crore this year, which would be equally distributed among the IIMs after deducting the cost of organising CAT.

Interestingly, a substantial part of the cost of holding the CAT is fixed cost and does not increase with the increase in the number of candidates appearing for the test. IIMs claim income-tax exemption by stating that they are “not-for-profit public institutions”. According to sources, the IIMs were using the profit from the CAT to cover losses in other areas.

Source: TheHinduBusinessLine