Tuesday, September 17, 2013

Engineering colleges in Karnataka offer freebies to attract students

The college campus wears a somewhat deserted look even during lunch hours. The classrooms are half empty. In one of the classrooms, a teacher stands at the front presiding over a bunch of unusually quiet students. Once in a while, students raise their hands to ask questions, breaking the monotony. This scene from an engineering college on Bangalore’s outskirts can be replicated and applied to many of the hundreds of engineering colleges across Karnataka that are scrambling to fill vacant classroom seats and in their struggle for survival are resorting to tactics never used before—offering freebies such as discounted fees, more scholarships and free hostel to attract students.

Placement heads and principals of a number of engineering colleges conceded the magnitude of the problem and the desperate tactics being undertaken, with students choosing to stay away from these institutes disheartened by the prospect of not landing a job in the country’s $108-billion information technology (IT) sector after graduation.


India trains 1.5 million engineers every year, according to an April research report by Kotak Institutional Equities. But only about 150,000 of them will get jobs in the IT sector this fiscal year, industry lobby Nasscom has estimated.

“The admission figures are very poor. We couldn’t even get 50% of the total intake enrolled (this year),” said M. Uma Devi, Principal of Achutha Institute of Technology, located in Karnataka’s Chickballapur district. “CET (Common Entrance Test, the engineering entrance test held in Karnataka) seems to hold no value now.” She said Achutha had taken a number of steps, such as scholarships, flexible fee structures and discounted admission fees, to attract more students. The college has reduced its fees to Rs. 20,000 per semester for each course, compared with close to Rs. 40,000 last year.

Like Achutha, hundreds of engineering colleges across Karnataka, mostly the smaller and lesser-known colleges, are offering a number freebies and concessions to students, including more scholarships, free hostel accommodation, discounts and free use of library and other additional facilities, according to dozens of college officials, students and experts tracking the sector.

According to a July report in The Hindu newspaper, nearly 80,000 out of about 200,000 engineering college seats are vacant in Tamil Nadu. In Andhra Pradesh, which has the most number of engineering colleges in South India, the figure is even higher at over 100,000 seats, while Karnataka has around 20,000 vacant engineering seats, according to people directly familiar with the development, who requested anonymity. State-level engineering admission authorities in Andhra Pradesh and Karnataka could not be reached immediately to confirm these figures.

“The problem we face is that the big IT companies don’t look at the II or III tier colleges for placements—they only look at the top colleges,” said Vandana Yadav, Placement Director at SCT Institute of Technology in Bangalore, which has an average intake of 60-70% of their total capacity in each batch. “And that can be demoralising for students at a college like ours.” SCT has extended benefits such as free books, free access to the college’s digital library and reduced hostel fees, Yadav said. “I don’t think such steps will help majorly. Given the slowdown in the job market, how will it make a difference?” said an 18-year-old first-year aeronautics student at SCT who did not want to be named.

The plight faced by most of these colleges is symptomatic of a larger and deeper crisis facing the country’s engineering populace—lower hiring in the face of lower demand for the country’s top technology firms, which over the years built large, plush campuses to house and train the hundreds of engineering graduates they mass-recruited from colleges across the country. Last month, Nasscom said it expected IT hiring this year to drop by up to 17% to 150,000, mainly due to an increased push towards automation and lower attrition in the sector. In 2008, the Indian IT sector hired 341,000 freshers, according to Nasscom.

“India faces a unique situation where some institutes (IITs, IIMs, etc) are intensely contested, while a large number of recently opened institutes struggle to fill seats,” said analysts Akhilesh Tilotia and Kawaljeet Saluja of Kotak Institutional Equities in their April report. “Across India less than four-fifths of the capacity is used and this spare capacity is unevenly distributed. It is not surprising that over the last couple of years, anecdotes and instances of ‘capitation fees’ at engineering colleges are not heard as much as they were earlier.” According to figures and estimates provided by the All India Council for Technical Education (AICTE) and Kotak, on an average barely 78% of the 1.5 million engineering seats across the country are filled.

GSS Institute of Technology in Bangalore, too, is handing out discounts to students, said a student who did not want to be named as he didn’t want to upset the college authorities. GSSIT’s Principal Vidyashankar B.V. initially said the college extended discounts and scholarships only to students from poor backgrounds, but eventually conceded that the move was also aimed at filling up college seats.

Other second-rung engineering colleges that are struggling with huge vacancies include Nadgir Institute of Engineering and Technology, Islamiah Institute of Technology, and Bangalore Technological Institute, according to students and people familiar with the matter who requested anonymity. These and another half a dozen colleges contacted for this article conceded that they were operating classes with a strength of 50-60%, but declined to comment on whether they were offering discounts to students. H.S. Nanda, Principal of Bangalore Technological Institute, declined to comment on whether the college had offered discounts to students who were admitted this year, saying that “the management will take that decision”.

“What’s happening now is that the moment you get an engineering seat you negotiate on the fee—that is happening now. Many colleges have started handing out 20-30% discounts or they’ll give you one full year of hostel free,” said Vivek Kulkarni, former IT secretary in the Karnataka government, and founder of Brickwork India, a credit rating agency. “And this has been happening a lot in the newer colleges that have come up.”

According to experts tracking the sector, none of the engineering colleges outside the rank of the top 40 in Karnataka are running at full capacity and hence are being forced to extend freebies to students. “In Andhra (Pradesh), this has been a phenomena for the last 2-3 years or so—in Karnataka, this has become rampant this year,” said Amit Bansal, Founder and Chief Executive of PurpleLeap, which offers training programmes at engineering institutes to improve the quality of education. “Significant discounts on first year fees is a very common tool that is being used—if you look at these colleges, at 50% intake, they’re breaking even— not losing money. If you start falling below that number, you go into the red.”

“Also, getting additional seats from AICTE has become much easier for colleges—so every college has gone ahead and increased their capacity,” added Bansal of PurpleLeap, which has conducted a study at more than 200 engineering colleges across Karnataka to assess the quality of education and employability of the students.

On top of that, freshers’ salaries at top Indian IT firms have remained stagnant the past 4-5 years and not kept pace with the increase in fees charged by engineering colleges. “It’s not surprising to see this happen now—there’s a complete mismatch between the kind of fees the colleges charge and the kind of job opportunities that are available right now. It’s just not sustainable,” said Narendar Pani, Professor at the School of Social Sciences at the National Institute of Advanced Studies.

Source: Mint, September 17, 2013

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