Growth of Engineering and Management Institutions in India Stalls

Growth of engineering and management institutions in Indian have come to a screeching halt, confirming the trend predicted in my earlier posts–Engineering Pipeline: Disproportionate and Disconnected in August’09 and Indian B-School Bubble? in July’11.

The percentage growth in number of engineering institutions in India have came down from high of 43% in 2008-09 (academic year) to 3% in 2012-13. This translates into slowdown in starting of new institutions from 720 in 2008-09  to 105 in 2012-13. Likewise, for business schools, growth declined from 33% in 2008-09 to 3% 2012-13. In terms of absolute numbers, the number of new B-schools declined from 417 in 2009-10 to 82 in 2012-13.

This decline is a combination of two primary factors–weak regulatory mechanisms and profit motives of some private players. During the years of high growth in engineering and management institutions corruption in regulatory authorities was also riding high and many institutions were approved by overlooking qualitative deficiencies for bribes. At the same time, many private players were rushing into education “business” as a low-risk, high cash-flow business with an opportunity to leverage on real-estate (another sector plagued with tax-evaded “black” money”) and tax-free status of pseudo-non-profits. This opened the floodgates of many private institutions which compromised quality to save money on soft and hard infrastructure. And, hence students graduating from these institutions were unemployable (of course, the recession did not help either) which in turn created negative word of mouth for institutions to get future student enrollment. Given that private institutions rely solely on tuition for revenue, lack of enrollment means financial instability. As a result, a large number of engineering and management institutions are now facing problems of vacant seats and are even available for sale. This in turn has slowed the growth of new institutions.

Although the growth of engineering and management institutions has slowed down, with 3,500 engineering colleges and 2,500 B-schools, India has disproportionately large number of institutions, indicating high value Indians place of job-oriented, professional programs with social prestige.


Dr. Rahul Choudaha


  1. I totally agreed with the facts stated by you. In general we see these days that lot of college seats that go vacant every year and this is the reason many of these institutions have shut completely or management and technology courses.

  2. Your assessment that the slowdown in the growth of for-profit institutes in India is a result of compromising on quality–leading to student unemployability–is spot-on. However, the specifics may be more complex. Institutes that invested heavily in physical infrastructure have not necessarily flourished–indeed, many are anxiously seeking institutional associations to turn around their ventures. A back-to-basics stringency in delivery has often been replaced by convenient pedagogical methods, often passed off as innovations or "industry-driven". Sometimes these are merely euphemisms for unstructured delivery mechanisms that rely too heavily on industry professionals to moonlight as teachers, and inadequately "grounded" input.
    No wonder, as you rightly point out, we have too many educational institutions. This correction is a good thing.

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