Monday, August 27, 2012

MBA loses shine as number of CAT aspirants falls to 200,000

The glamour of sporting an MBA badge seems to be losing its sheen as aspirations change among India’s youth amid an economic slowdown and some difficulty in getting jobs. A leading indicator of this is the waning number of aspirants writing the Common Admission Test (CAT) to qualify for postgraduate programmes at the country’s top business schools.

A panel of faculty members of the elite Indian Institutes of Management (IIMs) that conducts CAT says this year some 200,000 people will appear for the examination, considered one of India’s toughest. In contrast, 276,000 wrote the test in 2008. And this at a time when the number of IIMs has risen to 13 from seven.

“Let’s respect the Gen Next’s career choice,” said S.S.S. Kumar, Convenor of CAT 2012 and a professor at IIM-Kozhikode. The turnout of CAT aspirants should not be treated like “companies’ quarterly results or like selling shampoo”, Kumar said. The trend does to an extent reflect the current state of India’s economy, he admitted. India’s central bank has lowered its growth projection for the economy to 6.5% from 7.3% in the financial year to March 2013. The economy grew at 8-9% every year between 2003 and 2008.

“The euphoria for management education that we saw between 2002 and 2008 is no more,” said H. Chaturvedi, Director of the Birla Institute of Management and Technology in Greater Noida on the outskirts of Delhi. Chaturvedi said the impact of the slowdown, growth in other career choices such as banking, and a mushrooming of management institutes in smaller cities without enough industry links have impacted the market.

“Many public sector banks have started hiring for the last three years and students now are going for it,” he said. “It’s a good career move at a time when management graduates are not finding many takers.” Chaturvedi also pointed to the fact that the supply of MBAs had gone up 300% between 2006 and 2011. India has at least 4,000 business schools catering to around 500,000 students, government data shows.

The drop in aspirants is not just restricted to CAT. Applications to most of the top-tier business schools are dropping. While the Xavier Aptitude Test, conducted by XLRI, Jamshedpur, received 102,329 applications in 2009, the number dropped to just 60,316 in 2011, according to research by MBAUniverse, a website that tracks management education.

That management education is losing its charm can be gauged from the fact that in the last academic year alone, 60 business schools applied for closure due to poor admission and placement response, Mint reported in March. “The regulator (government) needs to understand these symptoms and act accordingly,” Chaturvedi said. “From the institute side, they need to focus on quality faculty, content and value creation. An MBA college is not like a normal college. Industry linkage is key for placement, hence location of the institute, too, matters.”

While experts say there is enough evidence that management education is facing a shakeout, CAT convenor Kumar said that while the trend needs to be analysed further, the number for CAT aspirants seems to have stabilized around 200,000. “We are halfway through and hope to reach around that number,” he said.

CAT 2012 will be conducted between 11 October and 6 November. Registration began on 30 July and will end on 19 September. The examination will take place in 36 cities across India.

Source: Mint, August 27, 2012

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