India: high demand for business education
MBA News Barbara Barkhausen / 09-28-2010
India is in dire need of more respected business schools, reports the “Financial Times”. In 1961, India started its network of high quality state-run business schools - the Indian Institutes of Management (IIMs) with the aim to create an elite, versed in the latest management thinking. But since the Indian economy is growing by 8 per cent per year, companies are desperately searching for business school graduates and the state schools can’t keep up with the demand.
Although the IIM system has grown from four campuses in the mid-1980s to nine fully equipped campuses today, in 2009 there were still 242,000 applicants across India that applied for only 1,800 admission slots. Private players have stepped into this gap. Some are determined to foster high-quality management talent and innovative research. Others however, abuse the high-demand market to make quick and easy money as the business education market is now estimated at 30 billion rupees or 645 million dollar, and growing roughly 12 to13 per cent a year.
Annually, 100,000 students graduate from these private institutions. Their knowledge and qualifications range from world class to so poor that they can't distinguish between gross or net profits. "If you look at the business school scenario, 80 or 90 per cent of education is through private schools. Of that, just 5 or 10 per cent are delivering quality education," says Shobha Mishra Ghosh, director of the higher education department at the Federation of Indian Chambers of Commerce and Industry (Ficci), a leading business group.
Often, students do not realise the poor quality of their chosen programme early enough. "Demand is so high for management degrees that most of these institutions are full," says Ghosh. "Most of the graduates passing out of these places take up jobs that are low paying, and for which you don't need a management graduate."
India has no independent accreditation agency for its business schools, though it has two government-affiliated accreditation bodies. But accreditation is not obligatory and is so bureaucratic and complicated, that many institutions opt to not get accredited. In this regard, the Indian system is not regulated enough - whereas it is highly regulated in the way that foreign universities are currently prohibited to enter the Indian education market by law.
One highly regarded business schools in India is the Indian School of Business (ISB), set up in Hyderabad in 2001 by the top Indian corporate and academic mind Rajat Gupta. The former managing director of McKinsey felt strongly that India needed to have its own world-class business school. The school was ranked 12th in the 2010 "Financial Times" list of global MBAs - the only Indian institution to appear. Other respected private Indian universities have also set up solid business schools. Mumbai's SP Jain Institute of Management & Research for example, the Manipal Institute of Management in Karnataka, or Symbiosis in Pune offer government-recognised MBA programs.