Is charm of professional institutions waning?

By ZRG | Updated: Nov 15, 2013, 00:39 AM IST

Zee Research Group/Delhi

It seems that return on higher education is falling as the growth rates of number of professional institutions are tapering down. According to All India Council for Technical Education (AICTE), the percentage growth in number of engineering institutions in India has come down from high of 43.2 per cent in fiscal 2009 to 5.3 per cent in fiscal 2012. This translates into slowdown in starting of new institutions from 720 in fiscal 2009 to 171 in fiscal 2012.

Likewise, for business schools, growth declined from 32.6 per cent in fiscal 2009 to 5.4 per cent in fiscal 2012. In terms of absolute numbers, the number of new B-schools declined from 374 fiscal in 2009 to 123 fiscal in 2012.Similarly, for MCA institutes, growth declined from 7.7 per cent in fiscal 2009 to 2.5 per cent in fiscal 2012. In terms of absolute numbers, the number of new MCA institutes declined from 78 in fiscal 2009 to 30 in fiscal 2012.

The overall growth of MBA education is negative in the books of the All India Council for Technical Education (AICTE). Between 2011 and 2013, the AICTE received 231 applications from management colleges wanting to shut down. The AICTE has okayed about 80 of them.

Citing the reason that supply is more than demand, Kris Lakshmikanth, founder and CEO of The Head Hunters India Private Limited, a company focusing on executive search for leadership talent said, “It is a question of supply of more seats than required .Until the economic slowdown happened, when India was growing at eight percent, people who passed out from top MBA colleges of the country were getting jobs.”

“People thought that MBA colleges are like gold mines, if you set up an MBA school, you will attract 400 -500 students and one can make huge amount of money out of that, but unfortunately students who joined Tier III and Tier IV institutions didn’t get good placements as their respective colleges failed to attract good companies. There was excessive supply than demand which resulted in closure of the colleges,” lamented Lakshmikanth.

Endorsing Lakshmikanth’s viewpoint, Abhishek Mishra, Minister of State for Science and Technology, Government of Uttar Pradesh, said, “The closure of these MBA colleges is actually a healthy sign for the industry and students as these colleges have failed to bridge the skills gap.”

Further, the Master of Computer Application (MCA) course saw similar fate. While 84 colleges stopped offering the programme last year; only 27 started MCA courses. They were put off by one or more of these three reasons: poor quality of teaching, lack of adequate faculty or no job offer at the end.

Economy’s growth is the need of the hour. Laxmikanth said, “Middle class people in the country are willing to invest in education as they think that it is the only way which will make their children’s future bright and prosperous. We can attract more universities and they are also ready to come. However, the need of the hour is that more jobs should be created in order to solve unemployment problem. Moreover, this will happen only when the economy will grow at eight to nine per cent.”