Despite a lean economic period, there is a mushrooming growth of b-schools across the country (Photo: Pete)

Even though 65 management institutes have applied to the All India Council for Technical Education (AICTE) expressing their desire to shut down, the party does not look like it is over yet. Because at the same time, as many as 86 new b-schools across the country have applied for approval from the AICTE to run PGDM programmes.

Of these 86, eight have already been granted approval, and the regulatory body is confident that despite concerns of a management education bust, there will be an overall increase in the number of b-schools as well as MBA seats in India this year. SS Mantha, chairman, AICTE is confident that post the second cycle, which is due to be declared by April 15, 2012, almost half the total number of applicant institutes will be granted AICTE approval. In all, AICTE has received a total of 669 approval applications for new institutes, including those for engineering colleges, MCA degrees, polytechnics, b-schools and others.

You can download this Excel sheet with the state-wise list of new b-school approval and closure applications, or view the highlights in the table below.

States that are likely to gain or lose the maximum number of b-schools this year

The b-school shakeout is highest in Rajasthan and Andhra Pradesh, while Maharashtra and Tamil Nadu are likely to gain the maximum number of b-schools this year.

Speculating on the reason behind Andhra Pradesh sending the maximum number of closure applications, Mantha said that at 2,000, the state claimed the maximum number of technical institutes (including management, engineering, MCA, etc) in the country, most of which were located in remote areas and had not been able to attract students.

The Andhra Pradesh government considers rampant AICTE approvals in the past as the main cause for the current shakeout. “There are a total of 946 MBA institutes in the state which offer a total of 91,995 management seats. Last year, almost 40% of the seats had gone vacant,” an official from the Higher Education department of Andhra Pradesh Government told PaGaLGuY. He further reasoned that since the state government had been funding the higher education of students with annual parental income lower than Rs 1 lakh, these students did not feel the onus of taking education seriously.

Read a previous PaGaLGuY story about the state of management education in Rajasthan

The continuing boom of b-schools in Maharashtra on the other hand may just be the result of educational entrepreneurs who had begun working on projects two years ago not wanting to stop midway. Dr Apoorva Palkar, president, Consortium of Management Education (COME) said, “According to me, since investors have already put in a lot of resources into laying the groundwork of new institutes, they would like to proceed with their plans even though they are aware of the current situation in management education.” Dr Palkar added that management seats were running vacant in Maharashtra largely in those b-schools that had been started in the past three to four years.

Nevertheless, sixteen times more b-schools have applied for closure in 2012 than the mere four that wanted to shut down in 2011, according to Mantha. Of these four from the previous year, two had been allowed an exit. The eventual granting of closures depends on a number of factors, including a No Objection Certificate that the host state government and affiliated university of the b-school have to submit.

On reports which stated that AICTE would not be giving approvals to new business schools from the year 2014, Mantha said that the regulatory body had indeed received requests from many state governments expressing concern over bulk AICTE approvals to institutes. But despite such concerns, new approvals could not be stopped immediately because institutes typically begin background work on their projects at least a couple of years before they approach the AICTE for approval, Mantha said.

In 2014, we will set up a review committee that will observe how many schools are applying for approvals, closures, or how many seats are running empty, Mantha said. This committee will then make recommendations that will be passed on to the Human Resource Development (HRD) ministry for their consideration and comments.

Without reviewing how the situation then will be like, it will not be right to say that AICTE will not grant approval to new institutes starting 2014,” Mantha clarified.

Full state-wise list of new approval and closure applications to AICTE in 2012