IIM MBA Degree: First established in 1961, the Indian Institute of Management (IIM) was a project envisioned by the Planning Commission of India during the 1950s. After consultation with UCLA Professor George Robbins, the first IIM campus was inaugurated in Calcutta — an institution established to improve business and management studies in the country.
Little did the inaugurators know that by 2023, there would be 20 IIM campuses in the country, with talks about opening campuses abroad. Therefore, we could argue that the vision of India's Planning Commission decades ago has been fruitful for future generations — however, today's economic parameters of evaluating an IIM MBA degree state otherwise.
An MBA from one of the 20 IIMs in India could cost a student between ₹12 Lakhs to ₹32 Lakhs per annum, depending on the course and specialisations. To sum up, the average annual fee structure of a basic MBA Degree from an IIM costs an Indian student around ₹20 Lakhs, making it ₹ 40 Lakhs for the entire curriculum, excluding living and miscellaneous expenses. Comparatively, the average salary the top performing students receive in a batch amounts to less than ₹18 Lakhs per annum. Reasonably, students who do not perform well earn even less.
Most Indian parents, if not all, aspire to send their children to an IIT or IIM. Although some dream of sending their children to state-of-the-art Institutes for education, others are more interested in the placements after the child receives their degree. It is this emotion that institutes such as the IIM are exploiting. They are selling the idea of successful placements after the completion of the course to inflate the demand for a seat in their institutes. Unaware of wealth creation and asset management, innocent parents are even selling their gold and other assets for their children to get an IIM MBA degree. Besides, the rate of education loans is also not making it more accessible.
The main questions arising after consideration include - Whether obtaining an expensive degree is an asset or a liability. We can aspire to join a reputed firm after getting admission to an elite higher education institute. However, will the placement or income through the job pan out exactly how we thought? After selling their family's assets, will students coming from rural areas recover the value in time after the course? Is it better to upgrade yourself by pursuing a skill online that could cost significantly less but provide similar returns on investment? Or is it viable to pursue an MBA from an institute that does not charge a similar amount? Lastly, would parents paying such hefty amounts for a degree not consider sending their children abroad?
The answers are subjective. Like they say, to each their own. Be that as it may, students and their parents must make an informed decision before making such an investment. At the end of the day, investing a similar amount in the stock market could lead to a much higher return. Yet, we find masses refraining from similarly spending on stocks and bonds. If that uninformed decision might seem risky, why does this feel safe?