Why MBA is expensive in India

MBA is among one of the most strongly desire courses to study as it opens the gateway to several jobs both in the country and abroad offering attractive remuneration.

In 2018 CAT Exam saw a remarkable boom in the no. of applicants with 2.41 lakh fresh registrations and 10,000 candidates re-appearing. As usual, the CAT exam was a whirlwind and is followed by other equally essential Management Entrance Exams such as SNAP, IIFT, and XAT and so on and so forth. No need to say, an MBA Degree is the current hot cake in the market and opens a glorious gateway to corporate careers. The bigger and reputed the B-School, the better the placements and higher the packages.

Masters in Business Management (MBA) is a two-year Postgraduate Program that can be pursued in several disciplines, including Finance, Marketing, HR, IT, and Operations Supply Chain. In the past decade, it has become one of the Most Popular Courses to Study in India and abroad. A graduate in any discipline, including Humanities, Commerce, Science, and Engineering, can enroll for this degree program.

But, as you all already understand, nothing comes free in life, everything indeed comes with a price. Be it India or abroad, MBA Degrees are expensive. Recently, IIM Ahmedabad was equated with other money-minting coaching institutes despite it being the most reputed management institute of the country and known for churning out future bureaucrats and CEOs, yet it had fingers pointing towards it. The reason: hefty fees for its different management programs.

Let us have a look at the reasons why MBA is expensive in India and also have a look at the Fee Structure of some of the popular and influential institutes of the country and some other aspects which are essential to discuss with this topic. So, let’s start.

Why are students inclined to study MBA?

MBA is among the most coveted courses for post-graduation as it opens the gateway to multiple job avenues both in India and abroad. The aspirants can crack through desired jobs in reputed companies at a managerial position. However, these opportunities depend upon the rank of the B-schools. The more reputed B-schools fetch more lucrative offers for the students.

Admission process in B-schools

There are several admission tests conducted for Admission for MBA/PGDM in an academic year. To secure a seat in a renowned business school in India, the aspirants are required to sit for the entrance tests. These are CAT, MAT, XAT, CMAT, IBSAT, SNAP, etc. The candidates are called for Group Discussion (GD) and Personal Interview (PI) after successfully passing the entrance test. The final selection of the candidate is based on the student’s performance in the entrance test, GD and PI.

It is to be acclaimed that before appearing for GD and PI in a specific B-School, the candidates also judge the placement assistance, infrastructure, facilities, faculty strength, provided by that B-School since all these schools charge hefty tuition fees from the students. 

MBA fees in various B-Schools in India

There are plenty of B-schools in India. However, there is only a handful of them that will ensure top-notch teaching and a good placement at the end of the course. These include Indian Institutes of Management (IIMs), Xavier Labor Relations Institute (XLRI), Institute of Management Technology (IMT), among others. Besides, there are other reputed B-schools which are known for their state of the art facilities, infrastructure, highly qualified faculties, and excellent placement offers etc. Here is a list of the top 10 B-schools and their fees:

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Fee Structure of IIM and Non-IIM Institutes

MBA Fees in India under Rs 1 Lakh

There are several MBA colleges in India whose fee structure is less than Rs. 1lakh. Even though their fee is low, all these institutes are recognized by University Grants Commission (UGC). The list of Popular MBA Colleges with less than Rs 1 lakh fees are mentioned below-

Why is MBA costlier than other courses?

It is a well-known fact that an MBA is also among the most expensive courses to study globally. Aspirants pay hefty fees to complete the two-year programme. Even before making it to a B-School, a candidate invests in Preparing for the Entrance Exams, too. So the course includes a large amount of money apart from the tuition fees of the B Schools. There are more than 3000 Business Schools in India offering an MBA degree, but one requires to meet certain parameters while choosing the course. Understanding these expenses, it is advisable that before taking the decision of joining an MBA course, the candidates must consider the prospect of the investment which revolves around the following parameters.

Preparation cost, tuition fees, opportunities, badge, value, alumni network, the overall Return on Investment, Scope of the MBA Degree, and choice of career. Taking a hefty Education Loan and not getting its’ worth can be intensely disadvantageous to personal finances as well as effect both personal life and career in the long term. Here we make an attempt to give you a clear idea about the expenditure you will have to bear when planning to study MBA.

It is still less expensive to pursue an MBA Degree from India in comparison to an MBA abroad, nonetheless, the fee is significantly high even for Indian standards and in common cannot be met without drawing an Education Loan. Some reasons which make an MBA heavy on your pocket are mentioned below:

Hostel charges

Most of the reputed B-schools offer residential programs. Students from all over the country aspire to enter these B-schools to study MBA and most of them opt for these residential services. This means they have to pay additional hostel charges.

Tuition Fee and the Cost of Living

In India at a premier institute, a 2 year residential PGP program will cost one approximately Rs 12-15 lakhs. Like for enrolment MBA degree which needs a GMAT exam need both higher fees and experienced professionals. Therefore, in India, an MBA degree needs shelling out 20-25 lakhs and 70 lakhs fees for an MBA Degree Abroad. Education loan is made available from different Indian banks against indirect security and/or co-signors at 10.5 to 12% floating rate of interest.

The Opportunity Cost

An MBA program is designed to develop candidates’ skills in certain domains. The degree is a qualification that gives a student a step-up in their career and enhances their competence and skill. So, the tuition fee for an MBA Course also includes an Opportunity Cost. This cost is the foregone salary, professional experience, and perhaps a promotion.

Preparation cost

To clear the MBA entrance examination, the candidates have to prepare themselves well in advance. There are several coaching centers spread all over the country that help the students prepare for the entrance exams. These centers charge a good amount of tuition fees from the students.

In the education industry, there are various players who focus solely on the MBA. For the written exam, the average cost of classroom coaching is around Rs. 25000. For Interview preparations and Essay Writing add another Rs 25000, especially for GMAT aspirants.

Cost of Application

CAT Application Fee is around Rs 1600, where you are eligible to apply to programs from IIMs as well. If you want to apply for other management institutes accepting CAT, you must pay for their application forms separately which costs approximately Rs 1500-Rs 2000. On the other hand, the application fee for Management Aptitude Test (MAT) is Rs 1,550, while that of the Xavier Aptitude Test (XAT) is Rs 1,700.  

The costs of GMAT are higher.  The cost of taking GMAT once is US$250 and the cost of sending an additional score report for every B-School is the US $28. Besides, one wants to buy application forms of each Business School, for each school which costs about the US $200. While applying for the entrance tests, the students must keep in mind the application fees payable for various examinations.

Full-time or part-time MBA programme

Fresh graduates usually opt for full-time MBA Programs while those already working and are more than 32 years of age prefer to pursue a part-time programme. These candidates pursue an MBA to gain benefits in their job namely for promotion and an increment in pay packages.

MBA grades

To reap the absolute Benefits of an MBA Degree, the pursuers need to maintain a good score or grade throughout. Academic excellence lays the foundation of their credentials. The top recruiters always take into account the grades/percentile of the candidates along with their skills and aptitude. Hence, renowned B-Schools always pay attention to these facts and prepare their students suitable for grabbing the best jobs in the industry.

Badge value

Before taking a decision of Joining a B-School, the students must consider the Badge Value of the institute. There are several ranking parameters to grade the institutes. All these good ranking institutes ensure for a lucrative job in the industry. But it is an undeniable fact that the candidate’s aptitudes, skills, capacity to think out of the box, perseverance, confidence play some vital role behind the selection of the candidate for the key position in a company.

Factors Affecting an MBA Degree

Either a student can choose for a full-time or a part time MBA Program, depending upon his/her necessity. Both of them result in an MBA, yet there are settlement to consider. A student go through a full-time degree won’t be able to work at the side, whereas an Executive MBA is for students who are usually 32-42 years of age who have acquire some work experience over time and desire to both work and study at the same time, without having to live on campus.

While going through an MBA degree other factors that come into play is Grades. Without scoring an overall good percentile, one cannot secure an admission into the top B-schools. Excellence in academic gives a solid support to the work that you do, is something no one can snatch away from you and shown in your work life as well, yet, Business Schools are apt towards real-world professional consequence and relationships. Naturally, before taking the final call on a candidate many of them value relevant work experience.

When is the MBA Degree Really worth It?

An MBA is only value the time, expense, and effort when the student plans to work long-term in a business-related fields, corporate career, company founder, etc. Students working in other industries, may not find an MBA of much use, unless they are in management or leadership roles.

In addition, it is not only about the act about procuring the degree, but about getting it from a reputed institution so you can bag good placement offers and use the brand value of the institution in your support for life. Hiring managers and Recruiters are not likely to view an MBA earned from an unknown or online-only educator in a good light. Forgoing a few years of work for working professionals to go back to Benefit an MBA Degree and doing so from an average college would be waste of money, time, and opportunity.

To becoming future leaders an MBA course from a top B-school gives a rather effortless sail, nonetheless, it should not be baffled with achieving leadership positions without the desired skills and emotional quotient and a poor personality. Out of the box thinking, perseverance, sincerity, and laboriousness are golden characteristics that can make an employee rise in life, regardless of an MBA or any other degree.

A degree of MBA adds to your resume and gets you that interview call, yet change the interview exist in solely on the candidate.

Summing Up

The cost of doing an MBA has a meaningful impact on individuals and their families as well. It is actually an advantageous degree and for students it would open many doors who dream of successful in corporate careers, nonetheless, it does come with its’ disadvantages and one require to evaluate both their long and short-term goals. The bottom-line is that the advantages of doing an MBA considerably outweigh financial costs associated with it. Despite the aspects of cost-benefit, a great majority of B-school alumni self-report very positive experiences and high value from their MBA Degrees.

Therefore, before drawing a conclusion, we may say that MBA, though an expensive degree, is of immense value in the corporate world. The benefits of an MBA degree outshine the expenditure it incurs. But before taking a leap, the aspirant must think of all its pros and cons.