5500 MBA Schools, Yet Only 7% Graduates are Employable

15 lakh engineering students graduate every year; 20-30% don’t find jobs, while others get below-qualification jobs.

Barring government run Indian Institute of Managements (IIMs) and a few others, most of the 5,500 Business schools in the country are producing “un-employable” sub-par graduates, earning less than Rs 10,000 a month if at all they find placements, an ASSOCHAM study has said.

Expressing concern over the decay in the standards of these B-schools, many of which are not properly regulated, the study by the ASSOCHAM Education Committee (AEC) noted that only 7 percent of the pass-outs are actually employable, except graduates from IIMs.

India has at least 5,500 B-schools in operation and including unapproved institutes could take that number much higher.

Around 220 B-schools had shut down in the last two years in cities such as Delhi-NCR, Mumbai, Kolkata, Bangalore, Ahmedabad, Lucknow, Hyderabad and Dehradun etc, the study says.

At least 120 more B-Schools in addition to the previous 220 schools are expected to shutdown in 2016.

Low education quality coupled with the economic slowdown, from 2014 campus recruitments have gone down by a whopping 45 percent, it says.

There are more seats than the takers in the B-schools. This is not surprising in the wake of poor placement records of the pass-outs. 

D S Rawat, Secretary General, ASSOCHAM

In the last five years, the number of B-school seats has tripled.

2015-2016, B-Schools offered 5,20,000 seats in MBA courses. 

2011-12, these schools offered only 3,60,000 seats.

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, the study says.

The need to update and re-train faculty in emerging global business perspectives is practically absent in many B-schools, often making the course content redundant. 

D S Rawat, Secretary General, ASSOCHAM

Only 7 percent of MBA graduates from Indian business schools, excluding those from the top 20 schools, get a job straight after completing their course, adds the findings of the report.

On average, each student spent nearly Rs 3 lakh to Rs 5 lakh on a two-year MBA programme. 

Their monthly salary is a measly Rs 8,000 to Rs 10,000.

Even the quality of IIM/IIT students coming out now-a-days in comparison with the last 15 years, has come down due to the quality of school education, it said.

The faculty is also another problem as few people enter the teaching profession due to low salaries and the entire eco-system needs to be revamped.

ASSOCHAM said that the mismatch between aspirations of students and their level of preparation are crucial as most of the fresh graduates are afraid of getting their hands dirty.

The flaw lies with the negligible hands-on training provided at tier-2 and 3 colleges, it said.

Rawat further said that the quality of higher education in India across disciplines is poor and does not meet the needs of the corporate world.

Of the 15 lakh engineering graduates India produces every year, 20-30 percent of them do not find jobs and many other get jobs well below their technical qualification. There is clearly a rush towards engineering which is largely made by parents and the society.

Indian economy is not growing at the same rate as the number of engineers. It is only the IT sector that absorbs engineers in large numbers, between 50-75 percent. There is a large mismatch in the aspirations of graduating engineers and their job readiness.

97 percent engineers aspire for a job in IT and core engineering. 

But only 18.43 percent are employable in IT and 7.49 percent in core engineering.