An apex body of more than 400 business and trade organizations has voiced concern that 93% of business school graduates were unemployable. The Associated Chambers of Commerce and Industry (Assocham) has noted that, barring a handful of top schools, such as the Indian Institutes of Management (IIMs), most of India’s B-schools are poorly regulated, and produce unemployable graduates.

Above: Only a handful of schools, including IIM-Bangalore, provide quality education (photo by Trilok Rangan, used under CC BY 2.0 licence)

An Assocham Education Committee study, released earlier this year, found that, after excluding the top 20 schools, only 7% of fresh MBAs  got placements, and many earned less than Rs 10,000 a month.

India has at least 5,500 B-schools, and the number could be larger if one included unapproved institutes, Assocham noted. It said around 220 B-schools had shut down in the last two years in the Delhi region, Mumbai, Kolkata, Bangalore, Ahmedabad, Lucknow, Hyderabad, Dehradun, and other cities. Another 120 were expected to wind up by the end of the year, it said. Campus recruitments were down by a whopping 45%, it said, because of the poor quality of education and the economic slowdown. 

Assocham Secretary General D. S. Rawat said, “There are more seats than takers in B-schools. This is not surprising in the wake of poor placement records.”

In the last five years, according to Assocham, the number of B-school seats has tripled. The total number of seats available in MBA courses in 2015-16 was 520,000, compared to 360,000 in 2011-12. Assocham noted in a statement that the “lack of quality control and infrastructure, low-paying jobs through campus placement and poor faculty are the major reasons for India’s unfolding B-school disaster.” It added that many B-schools were doing practically nothing to update and re-train faculty in emerging global business perspectives. It noted that fewer people were entering the teaching profession, because salaries were low, and added that the entire ecosystem needed an overhaul.

Assocham’s study found that on average, students spent Rs 3 lakh to Rs 5 lakh on a two-year MBA, and their monthly salary was between Rs 8,000 and Rs 10,000. It noted a decline in the quality of even IIM graduates over the past 15 years, and attributed it to the quality of school education.

It said the mismatch between students’ aspirations and their level of preparation was significant, and noted that most fresh graduates were afraid of getting their hands dirty. “The flaw lies with the negligible hands-on training provided at Tier 2 and 3 colleges,” it noted.

Mr. Rawat said that the quality of higher education in India across disciplines was poor, and did not meet the needs of the corporate world. Of the 1.5 million engineers India produced every year, Assocham found, 20 to 30% do not find jobs, and many others found jobs well below their qualification level.

The Assocham report noted the sustained popularity of engineering, adding that it was “engineered largely by parents and society”.  It said the Indian economy was not growing fast enough to keep pace with the growing number of engineers. Only the IT sector absorbed engineers in large numbers, it added. It highlighted a mismatch in the aspirations and job readiness of graduating engineers, saying 97% of them aspired to an IT or core engineering job, but only 18.43% were employable in IT and 7.49% in core engineering.