At one level, the ability of the Indian Institutes of Management (IIMs), other top-rung private B-Schools and the Indian Institutes of Technology (IITs) to achieve placements at steadily rising entry-level salaries in a tough jobs market is a reflection of the high reputation these institutes enjoy. The upcoming placement season is expected to be no different, with these B-schools expecting a 5-10 per cent increment in starting salary offers to Rs 2 million, against average domestic salaries of Rs 1.8 million. The consistent placement success of India’s reputed B-schools, however, should not be cause for unalloyed optimism. It masks a deeper malaise in business education in particular and education in general. Below this “creamy layer” of 50-odd schools lie some 3,000 others — known as Tier 2 and 3 schools — catering to students who do not make it past the ultra-challenging entrance exams of the Tier 1 schools.
But so inadequate are the standards and monitoring systems of the All India Council for Technical Education, the principal certifying body for business administration programmes, that less than half the graduates from these institutes get placed. The lucky ones accept annual starting salaries that leave them deep in debt for many years. This poor showing reflects an intrinsic anomaly of Indian education: Unlike in the developed world or Southeast Asia, academic brilliance exists alongside extremely low average academic standards. The best educational institutions, with lavish resourcing and high faculty standards, are undoubtedly world-class. Their qualifying standards alone ensure that only top rankers enter their portals. Other less brilliant and average students are forced to fall back on institutions that are little more than diploma factories with abysmal faculty or academic rigour.
Yet this middle-level cohort forms the bulk of MBAs in the country, and it is on raising the standard of average students in less exalted institutions that education policy should focus. Judging by the proclivity of major recruiters, the average standard of the average Indian MBA is poor. MBA students are not the exceptions, either. A study by Aspiring Minds, an employment solutions company, found that of the 1.5 million engineers entering the job market, only 7 per cent are employable. Ironically, MBAs from second- and third-rung institutions may enjoy a slight advantage over the engineering counterparts in that they are occasionally viewed as “value for money”, and tested through internships or temporary offers.
India’s principal education regulators have failed miserably to enforce the kind of standards that should have produced a genuine demographic dividend for the country. Having a small cohort of world-class institutes alongside a vast number of third-rate ones is hardly the way to go about it. Indians’ constant thirst to over-qualify themselves for the scarce number of jobs has spawned a fly-by-night education industry, which dupes students and recruiters alike. As Indian policymakers seek to narrow the gap with China, education policy must urgently focus on raising the quality of average students too.