MBA ke Side Effects

The objective of this article is not to deter anybody from doing mba but to enlighten a very relevant but least stressed angle of looking at mba education. Most aspirants either neglect it before jumping into mba or never ever look at it seriously while considering doing mba and often end up in a soup . Before beginning this discourse i would like to stress that I am a firm believer that if one does mba one should do it from the best possible places keeping in mind future growth prospects . These best possible places include for finance IIM C , for ops NITIE , for hr XLRI , for marketing IIM A , B apart from all these JBIMS, FMS are also very good. Now having said that lets look at life post MBA . Even in the top 4 institutes of india the average salaries( quoted ones) are 14.8( IIM A) , 17.2 ( IIM B) , 13 (IIM C ), 16 (XLRI) and so on . Now these figures are just average salaries which means there would be many who would get less than this figure. Now fees of each of these colleges is well beyond 15 lakhs.As far as existing schemes for taking education loans from nationalized banks is concerned , the least interest is around 10.25% and for a 5 year payment scheme( meaning you will be paying the amount in 5 years from date of start of earning) the EMI payable per month is usually around 30-35 K per month, Now lets come down to the figures of average salaries. In each of the quoted figures there is always a variable component . In general a package includes joining bonus (one time) , retention bonus(one time after 3 years ) , fixed pay , variable pay , extra benefits. All this components differ from company to company but in general take home pay for figures quoted above is around 70-80 k per month. Again please remember it is average pay there would be very many who will be getting below than this and depending on batch strength , reservation , industry demand get down to as low as 50 k per month even in top 4 colleges . Now out of the 75 K 30-35 K would go in EMI ( it can be as high as 50 k if u take entire amount in loan). The remaining amount now is 40-45 K out of which atleast 15-25 K would go in finding accommodation (a decent place in places like Mumbai , Delhi , Bangalore where 99% of mba grads would join ,it can be even costlier). Now remaining amount is say 20-25 K . There would be transport cost( up and down from your office would be high incase u opt for cheaper place away from office) , lodging costs , food costs. Al though such costs will vary from person to person but taking a moderate count in a place like mumbai , bangalore or delhi it would be around 10 K . So that leaves with 10-15 K monthly savings. Although yes savings can be more if u are staying in your house and are among super lucky ones to get such a posting but n general this is what will be the case for the first few years of doing mba.
For those who perhaps do mba for more money (including me) this figure may not be that attractive but then i would say it is just for a few years after that once loan is out of the way and u get a house of your own and a vehicle of your own life will be lot easier . Salary increments are usually 5-15% in most companies a year but then the inflation per year in india these days is also ranging to be 6-11% so that will eat into the hikes . So people often switch from one company to another .But then premise of reduced cost of living as we just explored came from having ones own house but that is becoming not commensurable with increase in pay with switches, which indirectly means if u opt to stay in your house always in one place then ur career growth options become limited and salary increase also becomes limited although your monthly rents of 15-25 k will be saved. Disclaimer: unlike in case of engineering where “langar “or hostel life is possible after mba it is not that befitting because mostly people marry after mba and respect of a manager would also deter one from sharing house or flat space. Same also deters a manager from taking public transport to office along with workers.