B-school salaries: The untold story

Stories of the high salaries offered to students from the Indian institutes of management and other tier-I B-schools reveal less than what they conceal. Consider this.

This year's highest domestic salary of Rs 22 lakh at IIM-Kozhikode was a whopping 233 per cent more than the lowest offer of Rs 6.6 lakh and the highest offer of Rs 18 lakh at IIM-Indore was over 200 per cent more than the lowest offer of Rs 6 lakh.

The scenario is no different when it comes to tier-II B-schools. The highest offer at ITM, Khargar (in Navi Mumbai), stood at Rs 14 lakh. 

A WIDE SPECTRUM (Domestic salaries in Rs lakh)
Institutes	Lowest	Highest	Average
IIM Kozhikode	6.60	22.00	11.76
IIM Indore	6.00	18.00	12.00
Other B-schools
ITM	3.31	14.00	4.80
IIFT	5.00	19.20	9.30
NITIE	6.00	12.00	-
XIM-B	6.00	12.75	8.77
JBIMS	6.50	15.00	12.26
SPJIMR	8.00	12.00	11.00

However, it was 324 per cent more than the lowest offer of a mere Rs 3.3 lakh. Similarly, at IIFT (New Delhi), the highest offer this year was of Rs 19.2 lakh (best offer among tier-II B-schools). This, however, was 284 per cent higher than the lowest offer of Rs 5 lakh.

While the premier IIMs – Ahmedabad, Bangalore and Calcutta – have yet to conclude the final placements, last year's (2006) figures reveal that the average salaries hovered below Rs 10 lakh.

Moreover, while the Rs 1 crore (Rs 10 million) and above international offers for the premier IIMs and ISB, Hyderabad (in particular), appear astronomical, the purchasing power parity (PPP) in foreign countries considerably reduce the appeal of these packages.

Average salaries at the IIMs and other tier-I B-schools, though, are seeing an increase of 30 per cent this year. However, the tier II B-schools recorded an average salary of just over Rs 8 lakh this year.

What's ignored often is that the salary figures quoted by B-schools in most cases are not reflective of a student's take-home (net) remuneration.

The salary comes as a cost-to-company (CTC) package, reflecting the financial burden of all kinds that a company bears towards the employee.

Besides the basic pay, this includes house rent allowance, leave travel allowance, variable incentives, bonus, provident fund, newspaper allowance, furnishing allowance and food allowance, et al.

Every year, India Inc needs around 1.3 lakh MBAs. However, MeritTrac recently concluded that 77 per cent of B-school grads are "unemployable."

Testing 790 graduates in six cities, it stated that of the 1,257 AICTE recognised B-schools in India, only 132 have been rated as "average or better" by the All India Management Association (AIMA), producing around 20,000 graduates every year who are not up to the mark.

"We believe that B-schools are not ready for industry. They don't teach the skills the market requires. General management courses are not enough. In many cases, we have told the institutes to find opportunities of better education and we are ready to fund them," says K Ramkumar, group HR head, ICICI Bank.

The bank plans to recruit 3,000 students from campuses this year, of which 700 will be taken from tier I B-schools.

In many cases, if the company pays a premium for the employee's life insurance policy, this too gets included in the CTC. Also, many companies include the joining allowance, which would include air fare, in the pay packet too. The basic pay that an employee gets differs as it varies due to the taxable income.

B-schools salaries hit the roof