60,000 MBA seats slashed over last 4 years; experts say market correction is still on

NEW DELHI, APRIL 25: The downward spiral in MBA education domain that started in 2014-15 continues as more B-schools seek closure despite a massive reduction of 60,000 MBA seats in B-schools over last 4 years.

Since 2014-15, which was the peak year in terms of seat capacity in B-schools, the intake capacity has only seen a consistent decline, even as a majority of management colleges reported large vacancies year-after-year.

Sample this: As per AICTE, in 2014-15, the total seat intake in PG management programmes across MBA colleges was 4,55,089. The 2017-18 admission year, however, had 62,000 lesser seats with the total intake reduced to 3,93,035 seats. In this period, the average vacancy level in management colleges stood at 40-45 percent of the total seat capacity.

B-school intake capacity & vacancies over 2014-18

*Source: AICTE

Experts explain this downward trend as a natural phenomenon. “The management colleges were mushrooming since the beginning of last decade. The market correction was long due. The mismatch in demand and supply was bound to go for a correction and that is what is happening over last few years,” said Dr Atish Chattopadhyay, Director, IMT Ghaziabad. The quality institution will, however, continue to flourish, he added.

More B-schools seek closure

The All India Council for Technical Education (AICTE) which is the regulatory body for management education in India, has received applications from around 100 more B-schools who are lining up for closure, official sources said. This will mean yet another reduction in seat capacity in management education. According to AICTE, for the admission year 2017-18, more than 20 management institutions have already been granted closure.

In 2016-17, a total of 76 institutions had closed down their operation while 39 new institutes entered the domain. The number of closed institutions a year before was 65 as against 23 new institutions starting their management programmes in the same year.

Adding to the woes of B-schools, this year’s placement trends that indicate below average growth in salary packages at top B-schools may further deter MBA aspirants from opting management courses where Return on Investment is increasingly becoming a concern.

The quality B-schools though admit crisis of huge vacancies in low-rung MBA colleges and possibility of a couple of more worsening years ahead, they believe that the trend does hardly make any impact on their admission prospects. “This trend can’t be generalised for all B-schools. The b-schools which lie at the bottom in terms of quality education, will bear the brunt,” said a B-school Director of a PGDM institute in Delhi-NCR.