Tough lesson for Indian business schools

Reality has finally dawned on youngsters' hunger for a business management degree - it had for long held forth a promise of immense riches via a plum job.

A boom in India's business management education sector that saw the number of business schools triple to almost 4,000 over the last five years has ended as students find expensive courses are no guarantee of a well-paid job in a slowing economy.

India's seemingly unstoppable economic rise, an aspiring middle class' desire to stand out in a competitive job market, and a lucrative opportunity for investors fuelled a bubble in business education that is now starting to deflate.

About 140 schools offering Master of Business Administration (MBA) courses are expected to close this year, as 35 percent of their places were vacant in 2011-12, up from 15-20 percent in 2006-07, a report by ratings agency Crisil found.

The boom which was there has gone, said Anshul Sharma, chairman of Asma Institute of Management, which he started in 2004 in Pune, about 150 km (95 miles) from Mumbai.

Those who entered this industry with a motive to make money are leaving because there is not much money left. Every college is working to sustain itself, said Sharma.

There was a near four-fold rise to more than 352,000 MBA course spots in the five years to March 2012.

But the allure of so-called B-schools outside the top tier is fading as the economy grows at its slowest in nine years, with the financial sector especially sluggish, and amid questions about the quality of some schools.

Only 29 percent of graduates from Indian business schools - excluding those from the top 20 schools - get a job straight after completing their course, compared with 41 percent in 2008.

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