Will setting up of one IIM in each state help broad base professional education in India?

Now this is an interesting topic! I hope this would topic would attract some comments.I would like to discuss the merits first:
1. Setting up new IIM would make quality education available a large chunk of population. IIMs in each state will really give a boost to North Eastern regions, which have lagged behind in terms of education.
2. This would reduce the cut throat competition and thereby reducing the anxiety among candidates appearing for CAT every year. Every person who dreams to be in IIM can actually fulfill it.
3. The companies will have wide variety of candidates to employ from. They can have a broader set of MBAs to choose from.
4. More and more managers will be produced. Some of them will even start their own venture. This would be a positive sign for India Inc. as it would lead to faster growth.
Demerits are as follows:
1. It would lead to dilution in the quality of IIMs. IIMs have for long been known as powerhouse of India which gives out best of the best managers. The IIM passout is treated with awe and appreciation. However setting up IIMs will only deteriorate the status of an IIM post-grad. It’s like too many cooks spoil the broth.
2. Already we have a shortage of number of professors in the faculty. Setting up more IIMs will only worsen the situation. This would lead to compromise in terms of quality and credentials of a professor.
3. Setting up a new IIM is not a great idea which provides post graduate degree. In an area which lacks primary education, the inhabitants will never think of getting a post graduate degree. Setting up new schools which impart primary education at low costs will be more beneficial.
4. The quality of students entering would deteriorate. Till now the candidates are selected with a rigorous selection procedure. However following such a process for so many candidates may not be possible and the process might be slackened. Even if the candidates are chosen as before, the bright students would prefer the already established IIMs and the newly built IIMs may not come into prominence for a long time!