After economic liberalisation in 1991 started unshackling the private sector, demand for MBAs shot up. Companies were willing to pay the top dollar to this new breed of executives who were seen as wunderkinds capable of putting family-held, traditional businesses on fast track. Management became a sought-after career for students and MBA the key to success in life. The three-letter acronym spelled money as well as status.
And even those who managed to get into B- or C-grade business schools could rest assured that they have made it in life. Old, geriatric tycoons hired 20-something MBAs at gargantuan salaries, installed them at the top of their companies and genuflected before them to seek business wisdom.
After more than two decades, the degree is losing its prestige.
In 2016-17, more than half of MBA graduates could not get hired in campus placements, data by All India Council for Technical Education (AICTE) shows. Just 47% of MBAs were placed, 4% less than the previous year, and at a five-year low. The drop in placements for postgraduate diploma holders was even bigger at 12%. The numbers do not include graduates from the elite Indian Institutes of Management (IIMs) which are not affiliated to AICTE.
There is a glut of MBAs in India. Out of nearly 5,000 management institutes across the country, about 200,000 students passed out in 2016-17. Add to that an overall jobs crisis in the country.
But the biggest reason behind the decline in job offers to MBAs is the outdated curriculum.
Excluding graduates from top 20 colleges, only 7% of MBA students from Indian business schools got jobs immediately after the completion of the course, an ASSOCHAM report said last year. The report found lack of quality control and infrastructure, low-paying jobs through campus placement and poor faculty as the major reasons for India’s unfolding B-school disaster.
Even engineering colleges face the same challenges. A few years ago, a McKinsey report said just a quarter of engineers in India were actually employable. Of late, some other studies put it at less than 20%. Recently, a survey by employability assessment firm Aspiring Minds said 95% of Indian engineers can’t code.
The AICTE has said it is taking steps to update and revise management as well as engineering curriculum so that the colleges produce job-ready graduates.
India’s employability crisis is all the more serious because the majority of Indian population is young. Increasing number of jobless youths is a big challenge India faces even as private investment is down and job creation is slow.