« Incentive Pay for Chilean Buses | Main | LASIK Shows Market in Health Care Works »


Rajeev Kasat

It is rather unclear that spending around 200,000$ for two years tution fee and expenses along with the opportunity costs in these two years is really worth that MBA and the increment in salary that follows. These programs majorly attract a crowd of high flying executives who carry with them the rich experience of more than four to five years in the world's best business firms at top positions and in most cases are in need of an MBA just because of the tag-value of a busines degree from the topshot B-schools.

In contrast the scenario in India is much different. The tution fees of top-notch Indian B-schools like the IIM's, FMS, and Schools of Management of the IIT's are quite low when compared to their US counterparts. Only recently, IIM Ahmedabad has hiked its tution fee to around Rs 1,100,000 for two years, which itself had raised a huge outcry in the student circle and media. Others such as IIT B-schools and FMS have tution fees ranging from Rs. 50,000 to 300,000 for two years. Even in my case at IIT Kanpur, the MBA costs me around less than 200,000 Rs including tution fee, living expenses, study materials and cost of laptops all involved. The median salaries range from 1,000,000 Rs to 1,600,000 Rs. at the top 20 Indian B-Schools. If you want to come at the US equivalent per capita then 100,000$ to 160,000$ per year. As far as the percapita foreign currency comparison is concerned, the value of 1$ in United States posses the purchase power same as 10 Rs in India.

Also, Indian B-schools even accept students with much lesser work experience and instead heavily concentrate on their aptitude and soft-skills for gauging management potential instead of relying more on work experience. Almost 30% of a class is fresher in the IIM's and around 20% in the case of MBA courses at the IIT's. So in this case, the MBA really makes a difference both in terms of learning as well as jobs and pay packages. The freshers come to learn and understand the world of business compared to the expereinced who just want a degree to flout unless they desire a change of career.

The IIM admissions commitee donot care if you are a poet. You may be a poet or fairy or whatever, but if you need to enter the top Indian B-schools you have to crack their tough entrance exams and obtain sectional cut-offs in each of the different sections of math, data-interpretation, verbal aptitude and sometimes even general awareness. Given the above, an average American or European management student would find it almost impossible to cope up with the quantitative and analytical rigor of the MBA programs of top notch Indian B-schools. The top-notch Indian Bshools are almost filled with aptitude geeks who have not only have cracked the worlds toughest aptitude entrance exams but also have proven their abilites as a potential manager in rigorous group-discussions and personal interviews.

Every year around 250,000 candidates sit for the CAT MBA entrance test. Out of those only around 2500 are able to qualify the examination to get a call from an IIM. Out of 2500 only around 300 candidates are selected to join the proutgramme. All the 6 IIM's combined there are totally around 1500 seats. 1500/2,50,000 makes the acceptance ratio for all 6 IIM's combined to around .6% compared to the individual 8 to 10% each of Harvard or Stanford.

Many people would place objections to the above line of thaought claiming that the idea of doing an MBA right after a bachelors is faulty and wrong and that the real learning and understanding of management and imbibing leadership skills can be had only after 4-5 years of work experience.Here we forget that an MBA is only one structurised and formalised part of Management education and it is not the only we could have it. Infact MBA marks the begginging of Management education for the fresher and not the end of it.

Rajeev Kasat

Sorry in above comment - its not percapita...
but purchasing power equivalent...



Bob G

Thanks, Rajeev, some really good points here.

I think the Indian way might work. The one watchout I see is when MBA students from India try to compete for jobs in the U.S. The U.S. student, who has had 4-5 years experience (along with a more recognized diploma), tends to get a leg up in the recruiting process. Unfortunately, this may mean that the Indian MBA student has to take an entry-level job that would go to U.S. bachelor's degree graduates.

Over the long term, this stuff tends to even out, and the best managers make it the farthest - regardless of where they went to school.

The comments to this entry are closed.

My Photo

Enter your email address:

Delivered by FeedBurner

My Day Job


  • More blogs about challenge dividend.