Mis-management? B-schools in India are struggling

Poor on-campus placements at many business schools in the country is resulting in a drastic decline in the demand for MBA courses, according to a survey, which says the only exceptions are the Indian Institutes of Management or IIMs and a few other top schools.

The survey, conducted by industry body Associated Chambers of Commerce and Industry of India (Assocham), has sobering statistics. "Only 10 per cent of graduates from Indian business schools, excluding those from the top 20 schools, get a job straight after completing the course, compared with 54 per cent in 2008," it says. Recruitment at campuses saw a steep 40 per cent decline in 2012, it says, and B-schools are now no more the top draw for students.

This in turn has resulted in more than 180 B-schools having to shut shop in 2012, including some based in metros like Delhi, Mumbai and Bangalore. Another 160 B-schools are struggling for survival and might shut down this year, the survey says.

There is also a problem of plenty. In the last five years, the number of B-schools in India has tripled to about 4,500. There were 95,000 MBA seats in the country in 2006-07; in 2011-12 there were 3.6 lakh seats. But in years of slow economic growth, job opportunities for MBAs have not grown in the same proportion.

The survey says many private schools are a business venture by "some management guru to earn money out of investment". The more media savvy schools, it says, draw students with big campaigns to showcase their achievements.

The survey faults students too. "Students are not concerned about the quality of education in an institute, they only want to know the placement and salary statistics and discounts offered on the fee structure and this has spoiled the entire education system," D S Rawat, secretary general of Assocham, has noted.

On the other hand, some students who participated in the survey said the entire focus of many B-schools was on placements and high salaries. Mr Rawat said that many of these schools had not updated their course curriculum or re-trained their faculty in an environment changing fast.

"There is no quality control, the placements are not commensurate with fees being charged, the faculty is not good enough and there is no infrastructure," he said.

The decline is not restricted to B-schools, Assocham says. Engineering colleges have seen a drop in interest as has the once much-sought-after Master of Computer Application (MCA) course. "Nearly 95 colleges stopped offering this programme this year," the survey says.

The survey offers students advice: Don't look at an MBA degree as a prestige tag for professional success. If you really want to do an MBA course, evaluate your current position, long-term goals and finances.