Shakeout in B-schools eminent; only 65 % seats filled: CRISIL

A shakeout in the business education in India seems evident as Indian B-Schools struggle to fill their seats as 35 per cent of the total seats available remains vacant, a research by CRISIL, says.
As per the CRISIL Research, an integrated research house, the average occupancy rate in 2011-12 declined to about 65 per cent for Indian B-schools.

One of the key reasons for this decline is the increasing number of B-schools which has resulted in availability of seats surpassing the demand among the students. According to the research firm, the number of seats offered by AICTE-approved B-schools has increased almost fourfold to 3.52 lakhs in 2011-12 from 0.94 lakhs in 2006-07.

“Occupancy levels are under pressure due to the significant increase in the number of seats across colleges, shortage of skilled faculty, absence of industry link-ups, increasing awareness amongst students about the quality of education imparted by colleges,” said CRISIL on the research.

The research firm anticipates a scenario where the lower level of occupancy may impact the ability of several lower-rung colleges to sustain operations.

Ajay Srinivasan, Head – Industry Research, CRISIL Research, said, “Low occupancy rates are making it difficult for many lower-rung colleges to sustain operations.  As a result, we expect a number of colleges to face closure or change in ownership over the next few years.”

According to the research firm, majority of the B-schools lack quality to attract students despite low penetration of higher education in India and healthy demand for skilled manpower.

“Quality of education is another major concern, as an overwhelming percentage of students passing out from lower-rung B-schools lack skill sets needed to start working, after graduating, without extensive training. A number of corporates have actually started in-house courses to train students for the exact job role,” the research says.

The research analysis also indicates a wide variation in occupancy rates across various states and grades.  Tier-4 B-schools, estimated to account for around 36 per cent of the total seats, had an average occupancy of only around 50 per cent, according to the research.

CRISIL’s education grading programme for B-schools factors corporate feedback, apart from it being based on parameters that are relevant to the corporate sector viz industry interaction, entrepreneurship, practical exposure.

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