Only 10% of MBA Grads Produced in India are Employable, Say Experts

An Article in Economic Times (ET) puts forward an alarming statistic – it says that out of the over 3 lakh MBA grads that India produces, only 10% meet the requirements of the industry!

While the article is an eyeopener on the state of ‘MBA’ education in the country, what is appalling is how these stories repeat themselves ad nauseam, without any real change taking place! 

Here is a carbon copy of this story, with almost the same title, except this one is from 2012 – Study: Less Than 10% of Indian MBA Graduates Are ‘Employable’

That the situation is exactly the same 3 years later in 2015 is worrisome.

Coming to the story in ET, an incisive comment on the article caught our eye – the comment talks of the huge difference between MBA candidates elsewhere in the world who typically have 3-7 years of work experience and graduates of pre-experience PGP/ PGDM courses in India, most of whom have none.

Consequently graduates of these pre-experience courses have a very limited understanding of the how businesses operate once they step out of B-Schools.

The author of the comment says this big difference in eligibility norms could be a contributing factor behind this state of affairs.

Infact, these pre-experience courses are accredited as Masters in Business Management (MBM/ MIM) by global accreditation agency AMBA, UK – but they are considered ‘MBA equivalent’ as per Indian accreditation agencies AICTE and AIU.

Fed on theory and foreign case studies that deal with situations faced by senior management (cases relevant to MBA students abroad who like One Year MBA students in India, have substantial work experience) students of these courses are led to believe that they are graduating as experts in management.

That this obviously far from the reality, is clear from the results of these surveys.

What makes the results even more poignant is that graduates of the pre-experience PGP/ PGDM courses don’t join companies in strategic roles with major responsibilities, the way an MBA student abroad or an MBA student from a One Year MBA in India would. In line with roles awarded to graduates of MBM courses globally, graduates of PGP/ PGDM courses in India are hired at an entry level. So it seems these graduates are being found wanting on even basic tasks.

Excerpts from the article in Economic Times: 

India produces about three lakh management graduates every year, but hardly 35,000 of them are employable, said experts who gathered here for a conference of B-school heads.

According to All India Council for Technical Education(AICTE), 3,54,421 students enrolled for MBA in 3,364 institutions across the country last year. Speaking to TOI at the southern regional round table conclave of business school directors and deans, J Philip, former director of IIM-Bengaluru, said, “Today, the requirement of managerial candidates in the Indian market is between 35,000 and 40,000 every year. There are two reasons for unemployment: Lack of global skills and excess supply.”

Philip said India is probably the only country that could help supply managers to European countries and Japan. “Most countries in Europe are facing a crunch,” said Philip, now the director of Xavier Institute of Management and Entrepreneurship, Bangalore. An expert, who did not wish to be named, said, “Around year 2000, there were about 10 world class business schools in India. Now we have 25, but we have a long way to go. We need an industry-oriented syllabus and interaction with industry to improve employability.”

“Many engineering graduates do not want to waste time. Hence they apply for MBA immediately after graduation,” said Nandagopal. “While in the US and Europe, institutes consider work experience as a criterion for admission to MBA. It is a mid-career education for them,” he said.

Parag Kalkar, director of Singhad Institute of Business Administration and Computer Application, Pune, said in the past 10 years the number of management institutes in the country had doubled. “While the previous central governments aimed at reaching the global enrollment ratio for higher education (27%), AICTE randomly allowed institutes of engineering,” Kalkar said.

According to AICTE, the number of management institutions have risen from 2,614 in 2006-07 to 3,364 in 2013-14. While the numbers continuously rose till 2011-12, at least 71 institutes shut shop in 2012-13 and 107 in 2013-14.

Kalkar added, “While quantity has improved, the government and AICTE have been compromising on quality. Institutes have been given approval without examining or inspecting documents, infrastructure, faculty and other basic requirements.”

Lack of industrial exposure of faculty and students is another issue. “Many institutes do not have faculty with industrial experience. Some wish to join a management institute immediately after completing their postgraduate study,” said R Nandagopal, director, PSG Institute of Management. The same applies to students, too.

“Many engineering graduates do not want to waste time. Hence they apply for MBA immediately after graduation,” said Nandagopal. “While in the US and Europe, institutes consider work experience as a criterion for admission to MBA. It is a mid-career education for them,” he said.

Read the original article on Economic Times. Cover image courtesy shesgotsystems.com

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