(Photo: Bilal Kamoon)

Business schools in India continue to want to shut down. This year, the number of technical college closure applications received by the All India Council for Technical Education (AICTE) has gone up by 23.9% since last year. Consequently, the number of b-schools being allowed by the regulator to shut down has also gone up by 14.6%.

Out of a total of 171 technical institute closure applications received by the council this year, 124 have been given the go ahead to discontinue. This includes 94 management and 30 engineering institutes. Like last year, the state with the highest b-school closures is Andhra Pradesh (37). It is followed by Uttar Pradesh (13) and Gujarat (9). Together, Andhra Pradesh and Uttar Pradesh make for more than half of the total b-schools shutting down.

State-wise business schools closed in 2012-13 and 2013-14

Speculating on the continuous rise in the number of closure application from Andhra Pradesh, SK Jena, AICTE’s regional officer in Hyderabad said that the lack of job opportunities seems to be the major reason driving students away from joining MBA institutes. The resultant vacant seats makes b-schools want to shut down.

Also, many students are having to work and support their families while pursuing their higher education. Among these students, distance learning MBAs offered by a growing number of universities in the country were gaining popularity over a regular MBA, he said.

The closures in Andhra Pradesh are despite the government’s efforts to promote higher education by providing funding to students with family incomes of less than Rs 100,000 per year. The state is also running schemes to teach students soft skills that will help during job interviews, said an official from the Andhra Pradesh State Council for Higher Education.

In another b-school boomer state Maharashtra, which has had a nearly 50% fall in applicants to MBA or PGDM programs this year, seven b-schools have been granted closure. Dr Apoorva Palkar, president of Consortium of Management Education (COME) insisted that one should not judge the future of business education in the state on the basis of this year’s poor applicant numbers. “Introducing the Common Management Admission Test (CMAT) in place of the state exam may have reduced applicants to the state’s colleges a bit. Maybe once students get used to the change, the situation will become better,” she said.

Read a previous PaGaLGuY story on the state of empty seats in Maharashtra this year

At the same time, the closure numbers do not seem to have discouraged newer technical institutes from applying or and getting AICTE approval. This year, 395 degree and diploma institutes have been granted approvals, according to SS Mantha, AICTE chairman.

There are critics of this continued expansion of capacity. “AICTE is giving an approval to open a technical institute to anybody who can raise sufficient funds and has minimal land space. Following such low standards for approval is leading to dismal quality of education and bad infrastructure, which results in vacant seats at b-schools across the country,” said Dr H Chaturvedi who heads the b-school lobby group Educational Promotional Society of India (EPSI) and is director, Birla Institute of Management and Technology (BIMTECH) in Noida.

B-schools have nothing to gain by applying for closure, he added. “In addition to upgrading the minimal requirements for approvals to technical institutes, AICTE also needs to regulate the existing institutes so that they are able to maintain their standards. This will help the b-schools attract students and start becoming profitable,” Dr Chaturvedi recommended.

In partial agreement with his opinion, Mantha said that b-schools needed to improve their quality if they had to survive. However, according to him, new institutes being added every year should be seen in positive light. “Access and equity are equally important. With a higher number of institutes, the chances of higher quality improve because of competition,” he said.