When Pranav Saxena walked out of his B-school convocation in Bengaluru last year, dressed in a crisp suit and holding a Rs 20 lakh degree, he was brimming with hope.
Two years of gruelling coursework, late-night case studies, and mounting loan EMIs had all led to this moment.
Six months later, he sits in a rented PG, juggling Excel sheets for a digital marketing agency that pays him Rs 25,000 a month, barely enough to cover his rent and loan interest. “This wasn’t the life I imagined when I cracked the MBA entrance,” he says, staring at the notification for his next EMI.
Pranav isn’t alone. Thousands of MBA graduates from India’s Tier-2 and Tier-3 business schools are waking up to the same rude shock: Big investment, little return. The MBA dream, once sold as a gateway to corporate glory, is fast becoming a cautionary tale. So where did India’s B-schools go wrong?
In 2024 alone, over 35% of MBA graduates from Tier-2 and Tier-3 business schools remained either unemployed or underemployed six months after graduation, according to an analysis of data from AICTE and NIRF-ranked institutions.
THE SUPPLY-DEMAND MISMATCH
India has more than 3,000 B-schools, producing over 3.75 lakh MBA graduates annually (AICTE, 2023). But the job market simply doesn’t have the capacity to absorb them all.
“Only about 10-15% of MBAs from Indian institutions are actually employable in roles that require business skills,”
– Aspiring Minds (now SHL), Employability Report
The rest? They end up in sales jobs, customer support roles, or internships-turned-jobs that pay less than a call center gig.
A Rs 20 LAKH GAMBLE: WHAT DO YOU GET?
Let’s break down the economics:
- Tuition Fee at Private B-Schools: Rs 15-25 lakh
- Living + Additional Costs: Rs 4-6 lakh
- Average Salary at Graduation: Rs 3-5.5 LPA (Rs 25K-Rs 45K/month) for non-IIM schools
- Break-even period: 8-10 years or more (if employed immediately)
A 2024 study by MBAUniverse.com found that over 60% of private B-schools ranked outside the Top 75 NIRF list had average placements below Rs 6 LPA, despite charging hefty fees.
THE REALITY CHECK: TESTIMONIALS
Ritika Mehta, a 28-year-old graduate from a reputed private B-school in Pune, took an education loan of Rs 18 lakh for her MBA. Today, she earns Rs 26,000 a month at a fintech startup.
“Almost 40% of my batchmates are still freelancing or preparing for government jobs. Some have even taken up teaching at coaching centres,” she says.
Her story isn’t rare-LinkedIn is flooded with MBA graduates from Tier-2 schools actively seeking work, often with posts titled “Open to Work: Any Opportunity Appreciated.”
WHERE THE SYSTEM FAILS
1.Low Admission Bar
Many private B-schools admit students with percentile scores as low as 30-40 in CAT/MAT/XAT, compromising cohort quality.
2.Weak Curriculum & Faculty
Outdated curriculum and lack of industry-experienced faculty make students less competitive.
3.No Real Industry Integration
Unlike IIMs and ISB, most schools lack strong industry partnerships or structured internships.
4.Fake Placement Stats
Several colleges inflate their placement data. Students are offered short-term contracts, unpaid internships, or fake job
offers just for the brochure.
NIRF RANKING: A WARNING SIGN?
While NIRF provides transparency, even some NIRF Top 100 B-schools reported average salaries below ?6 LPA, including:
Rank 70-100 schools: Rs 4.2-Rs 5.5 LPA
Top private MBA colleges (non-IIMs): Rs 5-Rs 8 LPA (median)
(Source: NIRF 2024 Management Rankings, Ministry of Education)
The average MBA loan ranges from Rs 10-Rs 20 lakh . At an interest rate of 11% over 7 years, total repayment crosses Rs 28-30 lakh. Missed EMIs damage credit scores, affecting future financial security
As per RBI’s Financial Stability Report 2023, education loan NPAs have risen to 7.9%, with most defaults from private institutions.
A MARKET CORRECTION IS COMING
AICTE deregistered over 350 MBA colleges in the last three years due to poor performance. Enrollment in MBA programs has dropped by 15% since 2020 in private colleges (AISHE, 2023)
WHAT NEEDS TO CHANGE
- Transparent ROI Metrics for each B-school
- Regulation of MBA fees in private institutions
- Third-party audited placement reports
- Greater industry-academia collaboration
- Introduction of alternate career paths like digital marketing, data analytics, and entrepreneurship within the curriculum
RETHINK THE MBA DREAM
An MBA is not a guaranteed pathway to success anymore. Students must assess the Return on Investment (ROI), not just the Brand on Brochure. If the ecosystem doesn’t reform, India risks creating an entire generation of overqualified, underpaid, and deeply indebted professionals.