140 B-schools likely to shut down this year

The strengthening economy and a boom in the job market in India had led to a sharp rise in the demand for management education. In the last five years, the number of B-schools in India has tripled to about 4,000 amounting to as many as 3,52,000 MBA seats, collectively. The demand has begun to deflate now, as economy growth rate hit its slowest in the last nine years and the quality of education provided by B-schools came under the radar. Read more about employability assessment of MBAs

As students begin to realize that an expensive MBA course does not guarantee a high flying job, the mad rush for MBA is seeing a correction.

According to a report by CRISIL, about 140 B-schools are likely to close down this year owing to sustainability issues. These management institutes had as many as 35% vacant seats in 2011-12, up from 15-20% in 2006-07. Barring students of Top 20 B-schools in India, only 29% MBA graduates in India got a job right after completing their course, as compared to 41 per cent securing a job in 2008.

According to KPMG, private education industry in India is worth Rs 2.77 lakh crore and is poised to grow to Rs 6.38 lakh crore by 2018. However, a third of overall management institutes in India are struggling and straining to survive. See details

B-schools are known to promote their placement statistics and salary packages to attract students. But many B-schools have made this their prime concern instead of focusing on quality education and imparting skills required by the industry. They even resorted to black-market tricks to inflate their numbers. Know more about placement fraud in B-schools

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