In India's competitive higher education landscape, engineering and MBA degrees from premier institutes like the Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs) have long been viewed as golden tickets to financial success and career stability. Parents invest heavily, often taking loans totaling lakhs of rupees, with the promise of high-paying jobs upon graduation. However, recent data paints a more sobering picture, revealing a declining return on investment (ROI) that challenges these assumptions. As tuition fees soar and job markets evolve rapidly under the influence of artificial intelligence (AI) and automation, many graduates are finding that the financial payoff does not match the hype.

This trend is not isolated to lower-tier colleges but extends to top institutes, where placement rates have dipped and average salaries have stagnated or fallen in some cases. For prospective students and families in India, understanding these shifts is crucial to making informed decisions about pursuing these popular programs.

The Widening Gap: Costs vs Earnings

The total cost of pursuing a four-year Bachelor of Technology (BTech) degree, including schooling and college fees in private institutions, can exceed Rs 34 lakh. Yet, the average starting salary for such graduates hovers around Rs 4.74 lakh per annum, particularly in software development roles. Factoring in inflation, living expenses, and modest annual increments of 10 percent, it could take over two decades to recover the investment. Government colleges offer better value at around Rs 6.3 lakh total, but even there, the ROI is pressured by market realities.

For Master of Business Administration (MBA) programs, fees at top IIMs range from Rs 15 lakh to Rs 25 lakh or more. While elite placements still boast averages of Rs 32-38 lakh per annum at places like IIM Ahmedabad and IIM Bangalore, reports indicate flat or declining trends at others, such as a 15 percent drop at IIM Indore. Nearly half of B-school graduates—46 percent—entered 2025 without jobs or internships, per the Unstop Talent Report.

These figures underscore a core issue: the exponential rise in education costs outpacing salary growth, exacerbated by an oversupply of graduates chasing limited high-value roles.

Insights from Key Reports: Finance Global and India Skills

The Finance Global Economic Outlook 2026 highlights a deepening ROI crisis across professional degrees, even from top institutions. It points to rising fees, uneven placements, and starting salaries failing to keep pace. Complementing this, the India Skills Report 2026 by Wheebox, ETS, CII, AICTE, and AIU shows overall graduate employability at 56.35 percent, up slightly, but with domain variations. Engineering employability stands at 70.15 percent, led by Computer Science at 80 percent, while MBA dipped to 72.76 percent from 78 percent previously.

These reports emphasize that while top performers like Uttar Pradesh (78.64 percent employability) and Maharashtra shine, skill mismatches persist. For more details, explore the India Skills Report 2026.

Engineering at IITs: Placement Pressures Mount

At flagship IITs, once synonymous with dream packages, cracks are appearing. IIT Delhi saw a 17 percent placement drop to 72.81 percent in 2023-24, with salaries dipping Rs 2.2 lakh on average across older IITs. Newer IITs report seven percentage point declines. Average CTCs range from Rs 18-25 lakh, far below the Rs 1 crore outliers that dominate headlines. Sectors like IT, once reliable, are hiring fewer freshers amid AI disruptions, pushing many into fallback roles paying Rs 3-5 lakh.

Mechanical and civil engineering branches fare worst, with employability below 65 percent, while CS/IT hold strong. Students from IIT Bombay and Madras still secure solid offers, but the overall trend signals a need for specialization in AI, data science, and emerging tech.

MBA Landscape at IIMs: Not All Glitter

IIMs continue to lead with averages like Rs 35.22 lakh at IIM Ahmedabad and Rs 34.88 lakh at IIM Bangalore for 2026 batches. However, global slowdowns and domestic shifts have led to pauses in placements and resignations at some panels. Consulting and BFSI dominate, but fintech and e-commerce roles are scarcer. With over 5,000 MBA programs in India, only the top 20-30 deliver strong ROI; others leave graduates competing for entry-level positions.

Women-led employability edges ahead in some metrics, but overall, the report urges a pivot to applied skills over pedigree.

Skill Gaps Driving the Disconnect

Employers prioritize AI fluency, data analytics, cybersecurity, and soft skills like communication and adaptability over degrees. The India Skills Report notes only 40 percent of hires are for new roles, with IT at 35 percent fresher intake. Traditional curricula lag, producing graduates unready for gig economies or project-based work, now at 38 percent growth. Tier-2 cities like Indore and Coimbatore emerge as hubs, reducing metro dependence.

• Critical thinking and problem-solving top demands.
• AI/ML roles pay 20-40 percent more across experience levels.
• Gig workforce to hit 23 million by 2030.

Rising Costs: A Family Burden

Private engineering fees have ballooned to Rs 16.8 lakh for four years, plus coaching and living costs. MBA at IIMs exceeds Rs 25 lakh, often funded by education loans at 10-12 percent interest. With stagnant entry salaries, EMIs strain young professionals, delaying life milestones like marriage or homeownership. Public institutions like NITs offer respite but face similar placement woes.

Voices from the Ground: Stakeholders Speak

Parents in Mumbai and Delhi lament loans for unplaced IITians resorting to startups or abroad migration. Faculty at NITs highlight curriculum rigidity amid NEP 2020 pushes for flexibility. Students pivot to upskilling via Coursera or Udemy, blending degrees with certifications in GenAI or cloud computing. One IIT Delhi alumnus shared, 'My Rs 20 lakh investment yields Rs 12 lakh CTC—ROI questionable without side hustles.'

Experts recommend internships (92.8 percent sought) and multidisciplinary exposure under NEP.

High-ROI Alternatives Emerging

Vocational paths in renewable energy, healthcare tech, and semiconductors show promise, with 1 million jobs projected. Data science bootcamps or integrated programs at IISc Bangalore yield quicker returns. For more on career advice, check this analysis.

Government Reforms and NEP Impact

NEP 2020 promotes flexibility, AI integration, and vocational credits. UGC's single regulator push and foreign university campuses (e.g., Deakin in GIFT City) aim to boost quality. Bihar's 213 new colleges and digital governance in Patna unis signal expansion, but quality remains key.

Future Outlook: Skills Over Degrees

By 2027, AI talent to reach 1.25 million, favoring adaptable graduates. Top institutes must revamp curricula; students, upskill proactively. Hybrid models blending degrees with certifications promise better ROI.

Actionable Steps for Students

• Pursue specializations in AI, cybersecurity.
• Secure internships early—92 percent value them.
• Choose government colleges for cost savings.
• Explore Tier-2 unis with rising employability.
• Leverage platforms like AcademicJobs for faculty insights and jobs.

The era of blind pursuit of engineering or MBA is ending. Prioritize skills, market alignment, and holistic growth for sustainable success in India's dynamic higher education ecosystem.

Photo by jaikishan patel on Unsplash