Lower Returns from Higher Education: A View from Hyderabad

22 08 2009


This is that time of the year when  professional colleges in AP conduct their counseling sessions for fresh admissions to Engineering, MBA and MCA courses. The students armed with  their entrance test (EAMCET and ICET) ranks  under considerable stress jostle for  information on colleges, streams, vacancies, fees etc and making their career choices. This year in AP and perhaps in many other states the managements of the colleges are also under stress, more than possibly the students.


Blame it on the global financial crisis. The global financial crisis may have had a nominal impact on the Indian economy, but the impact that it had on the employment scenario of fresh engineers has been significant. The IT and ITES companies which have been the largest recruiter in the campus until last year have virtually stopped recruiting. Out of the over 180,000 engineers who passed out from AP in 2009, no more than 10,000 were taken by the local IT industry.


The poor placement performances in 2008 and 2009 have had a telling impact on the preferences. There is an about-turn in the demand for disciplines which feed the IT industry from being the most coveted to the most avoided. The engineering disciplines like Information technology, Computer Science and Electronics are being avoided like plague. Similar sentiments prevail for MCA admissions too.


For AP, that has the distinction of having the largest number of engineering colleges in the country, numbering 577, with over 240,000 seats. Nearly 100 new colleges got their approvals in 2009 alone.


The drop in demand and the increase in supply have created a huge glut in engineering and MCA seats in the state. This has forced the managements of many private colleges to go on an advertising campaign to enroll students. Education fairs are being held all over the state to persuade students to join a particular engineering college. There are canvassing agents appointed who promise colleges in relatively better colleges even if the candidate has a lower EAMCET rank.


Out of the 242,000 plus students who took the EAMCET admissions test for engineering admissions, over 81,000 students who had a rank did not show up, even after two rounds of counseling. This would mean that many seats would go vacant. The Deccan Chronicle quotes Mr. Rajeshwar Reddy, the General Secretary of AP Engineering Colleges Association


“This is not a good sign. If thousands of seats lie vacant, then it will not be financially viable to run colleges.”


When, the merit based seats are going vacant, then the demand for management seats would be even lower. Usually 20% of the seats are reserved as management quota and the management quota fees are usually four times the free payment seats. The entire business model of private engineering colleges is based on the earnings from management quota. Now, this assumption has been severely impacted.


The admission scenario in MCA is also similar. MCA seats have also increased this year, but the number of students opting out of MCA counseling is very high. The MBA admissions scene is slightly better. In fact, many colleges which offer both MCA and MBA are asking the government and the university to convert their MCA seats into MBA seats. A news item reports that even general graduation seats for BA/B.Sc in universities are going abegging, thanks to the huge number of seats in engineering.


As if the placement and admission blues were not enough, there are huge question marks being raised on the quality of engineering education in the state. The raids on AICTE officials first came to light in AP when an AICTE official was caught red-handed seeking money for accreditation while dealing with an AP based engineering college. As if to prove that the quality of education was indeed poor, the pass percentage for first year engineering at JNTU, the technological university which oversees the technical education in the state, had a meager 29 %. Out of the 1.8 lakh students who appeared for the first year, only 49,000 could clear the exams. This is in a university where most students rely on guides like “All-in-one” (a guide where last three or five years’ exam papers of all subjects are solved) and usually the exam papers usually do not change, including the order in which the questions appear.


If really the quality of the education was superior, surely the government could have allowed foreign or non-local students to come in, but it is not.


Each of the stake-holder needs to take blame for this mess


  • The IT and ITES industry which created in an illusion that they will continue to grow at 25%+ year-on-year. NASSCOM projected a 500,000 shortfall by 2010. Instead of a shortfall, India will have a huge surplus. The industry also in its eagerness to keep up with their own growth targets, allowed the quality to fall.
  • The students and their parents who rather than looking at planning the careers based on the capabilities of the student, got carried away by the hype of the IT industry. Also, taking such a short term view now by avoiding the IT oriented disciplines.
  • The promoters of the engineering colleges and the politicians (usually both are same), were too greedy for short term profits and assumed that whatever the quality of their delivery, the demand for higher education will continue.
  • The less said about the regulators AICTE, UGC and universities the better.


This correction in the higher education sector is long overdue. When the regulators are lax, the market forces have their own mechanisms to correct such anomalies. Hopefully, in this correction phase, the wheat will be separated from the chaff and many of the hole-in-the-wall teaching shops will close down and  the balance in the demand for different streams of higher education will be restored.


At the end of this phase, if the standard of higher education in India gets better and the employability of the output of its institutions is improved not only  the IT/ITES sector but the all other sectors of the knowledge industry, this pain would have been well worth it. 

– G. Mohan




3 responses

19 02 2010

Nice topic!
Now i know why i keep an eye on this site so much!

25 09 2010

Satisfied to solder together you guys.

9 10 2012

If I had known that before I would have done it differently.

Discount Medical Cannabis Seeds

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: