B-Schools To Face Tough Chapters In Supply& Demand

The strength of India's Management Education Sector seems to be increasing from a few years. The number of Business schools has triple to almost 4000 over the last five years has now ended as students find expensive courses are no guarantee of well-paid job in slowing economy.

India's seemingly un-spotted economic rise, an aspiring middle-class desire to stand out in a competitive job market, and a lucrative opportunity for investors fueled and bubble in business education that is now starting to deflate.

What is the drop down.

Almost around 140 schools offering Master of Business Administration (MBA) courses are expected to close this year, as 35% of their places were vacant in 2011-12, up from 15-20% in 2006-07. The report was provided by the Ratings Agency Crisil.

Anshul Sharma, chairman of Asma Institute of Management, which he started in 2004 in Pune, about 150km (95 miles) from Mumbai said "The boom which was there has gone. Those who entered this industry with a motive to make money are leaving because there is not much money left. Every College is working to sustain itself".

There was a near four-fold rise to more than 352,000 course spots in the five years in order to March 2012. But the allure of so-called B-Schools outside the top tier is fading as the economy grows at its slowest in nine years, with the financial sector especially sluggish and amid question about the quality of some schools.

Only 29% of graduates from Indian Business schools- excluding those from the top 20 schools get a job straight after completion of thir course, compared with 41% in 2008. Sharma also said that "The B-schools have promoted their brand only on placements and by boasting about salary packages. The course is theoretical and you don't learn the skills corporates want".

The Struggles In Business Field :

Private Education is big business in India. KPMG pegs the industry at nearly $50 billion and projects it to reach $115 billion by 2018. But growth rates are not uniform across the primary, secondary and tertiary education sectors. At the peak before the global financial crisis, new business schools were cropping up almost every day, some in remote towns where even quality secondary education is hard to come by.

There are two starnds of MBA courses. MBA degrees are offered by schools overseen by the All-India Council for Technical Education (AICTE), the regulatory body for higher education. These schools must be affiliated to a university, have a maximum of 120 students and fees are crapped by the state governments.

A second stream allows colleges to offer diplomas that are not accredited by AICTE. There are no standardized curriculum's, class sizes are bigger and fees can be higher. An institution can offer both accredited and non-accredited MBA courses.

Dhiraj Mathur, executive director at PricewaterhouseCoopers said "They were not thinking about the faculty, location, employability and brand name. They thought setting up a school would take care of the rest". Now, some new institutions are discounting their autonomous courses despite often better quality education, because with no guarantee of a job, students are opting for cheaper, ALTAIC-approved courses.

What is spoiling the system.

Schools with little or no track record fill seats by paying existing students up to Rs. 40,000/- for referring other students, Sharma said, whereas some hire agents, paying them upwards of Rs.50,000/- for every students they get. Sharma cannot afford to pay high commissions and is struggling to fill the 120 seats at his institute. Last year he had enrolled 45 students, and needs about 80 to break over.

He said, "Today, students do not ask what and how they will be taught. They only ask about placements and salary packages, and what discounts we offer on the fees". "This is spoiling the education system despite but if we don't try and accommodate them we will not be able to survive".

Elite institutes still attract students despite high fees as they have strong reputations, and their graduates are favoured by recruiters. Online job portals MyHiringClub.com has found a average starting salary for graduates of India's top B-Schools was about $32,400 i.e. about 1.8 million rupees more than four times the average of $7550 for other MBA Graduates.