Not enough takers for Management Education

By Ruchi Shrimali

Seventy B-schools have closed down this year. Still others are on a lookout for buyers who have a brand name and are looking to expand their horizons. Depending on the availability of land, location, and infrastructure investment, such business schools are priced between Rs 5 to 10 crore.

The current scenario is evidence to the fact that students in India are now losing interest in getting an MBA from small-time B-schools with inadequate facilities. The KPMG report pointed out that the management education bubble has finally collapsed. The industry that had been growing at the rate of 1600 per cent for the last two decades is now facing a slowdown, forcing small players to leave the market space.

One of the key challenges MBA students faced is lack of quality infrastructure and facility. In many management institutes, there are not enough faculty members. Besides, B-schools also indulge in malpractices like leasing out students as free employees in the name of internships, and hiring faculty and infrastructure just for AICTE inspections.

The number of Common Admission test (CAT) takers that had been growing at a rate of 27 per cent from 1,80,000 in 2006 to 2,30,000 in 2009 declined to 1,86,000 last year.

The coaching industry has also taken a hit. The coaching institutes offering CAT and other management entrance preparation programs are now look at alternative models. They are also adding coaching programs for other courses, such as banking and law, in their portfolios.

The institutes that had banked on growing popularity of MBA programs and had invested more in their infrastructure and faculty are now finding it difficult to bear the costs of excess resources.

At present, there are about 3,500 B-schools in India offering MBA, BBA and postgraduate diploma programs in business and management. Cygnus, a business consultancy, conducted a study and reported that top 50 B-schools in India churn out only 25,000 fresh MBAs every year while there is a need of 2,00,000 fresh MBA across sectors this year.

The management courses are losing their charm due to lack of quality control, despite the fact that the National Skills Development Corporation has predicted that management professionals will soon form a big chunk of the 34.7 crore skilled labour in India. These management professionals will be in demand across various sectors such as banking and financial services, organised retail, and infrastructure. Read more

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