Indian Engineering & MBA Institutions: Growth Trends and Data

Number of engineering and management institutions in India have grown at an clipping rate of 19% and 16.5% CAGR in the period from 2005-06 to 2009-10 (AICTE). Likewise, the annual intake of students for engineering and management programs increased by 21% and 22% CAGR respectively in the same period.

However, Indian economy grew at a slower pace in this period. Indian GDP grew at a CAGR of 12% from 837 billion in 2005 to 1.31 trillion in 2009. This indicates that supply of students has outstripped the demand of the economy and hence there will be many more unemployed engineering and MBA graduates in the Indian labor market.

Further, given the lack of an effective policy framework and supporting professional standards, many institutions which started in last few years are of poor quality. Thus, the number of students in professional programs like engineering and management have not only been increasing at an unmanageable rate but also graduating with lack of skills. This is evident from many vacant seats remaining for engineering and management programs. In addition, there is a situation of credential inflation where people keep chasing degrees in the hope of finding better career prospects.

 

I believe that in next five years, a wave of consolidation is expected where some institutions will start closing down or merging due to their inability to adapt to the demand for quality and raising resources. Many others, which start gearing up for quality will survive and in fact, create a strong competitive advantage.

More engineering graduates, driven by underemployment or unemployment, will seek graduate programs abroad and hence education pipeline for students going abroad will continue to be healthy.

Feel free to share your thoughts/comments/experiences.
Dr. Rahul Choudaha

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