Test taking trends for MBA admissions abroad seem to imply that there is an inverse relationship between the economy’s strength and B-school enrollments. The number of test takers for the Graduate Management Admissions Test (GMAT) from July 2007 to June 2008 was the highest number since the test was established in the 1950’s. The second highest number was in 2002 after the 9/11 attacks which severely weakened the American economy. Further, the numbers of Indian visas for the United Kingdom and Australia have also significantly increased in 2008.
“The economic slowdown will affect MBA applications for foreign business schools as only candidates with work-experience apply to such programs. If pink slips are handed out then it is natural for people with work-experience to strive to do an MBA at B-schools abroad. In India, the scenario is not the same with fresh graduates constituting up to 85 percent of applications at a business school and I do not really believe that the economic slowdown has significantly contributed towards a spike in applications,” opines Professor JK Mitra, Head and Dean at Faculty of Management Studies - Delhi (FMS).
FMS, Delhi has interestingly enough with 75,604 applications recorded a rise of just over 14,000 applications for 2009-11 admissions while an increase of all of 21,000 was recorded for 2008-10 admissions. “Freshers usually work in sectors such as IT and IT enabled services before enrolling in an MBA program and some shrinking has happened in these sectors but nothing noteworthy as such. The recession may have had an impact on this year’s applications but that can be deduced only at the time of GD-PI when candidates will be asked about the options they had at their disposal before opting for an MBA. Intuitively speaking, I think about five percent of the 20 percent increase that we have recorded in admissions will be due to the recession. The remaining portion would be because of simplification of the application process with a provision of online payment being provided from last year onwards and an increase in awareness of the school,” Professor Mitra goes on to explain.
By November it was clear that the world was in the middle of a global economic slowdown. CAT 2008 was taken by over 2.75 lakh MBA aspirants. Applications for institutes such as Management Development Institute – Gurgaon (MDI) and International Management Institute – New Delhi (IMI) which accept CAT scores were open till November 15. TA Pai Management Institute – Manipal (TAPMI), FMS - Delhi and Institute of Management Technology – Ghaziabad (IMT) were MBA colleges that had application deadlines of December 1. “I appeared for CAT but do not think that I have scored enough to get admitted to an IIM. Apart from CAT I did not write any other MBA entrance test as I had thought that placement from IIT Delhi was guaranteed. By November, news of the economic slowdown had come through but I still thought that getting a campus placement from IIT would not be an issue. Placements here began on December 1 and I haven’t got placed yet. There are five to ten people whom I know to be in exactly the same situation and we regret not having filled application forms for MBA. Placements have been very surprising with companies promising to recruit ten-fifteen students and eventually hiring about two or three people. A lot of us are trying for off-campus placements and have begun approaching companies for jobs,” says Ankit Gupta, a final year student at IIT Delhi. The gravity of the placement situation can be gauged from the fact that a world renowned company such as Schlumberger Limited recruited three students from the institute and then proceeded to revoke the offers.
Applications for 2009-11 admissions at TAPMI have in fact witnessed a minor drop with respect to last year. The business school received 4,500 odd applications for the past two years but had recorded 7,500 applications for 2007-09 admissions. “The last date for applying to TAPMI was after CAT and with coaching centers providing comprehensive analyses after the examination, students are in a much better position to judge the schools at which they stand a realistic chance of admissions and hence go about applications in a very systematic manner. Low marketing may have contributed to applications to TAPMI not increasing. Students also have not taken the recession seriously as the Indian economy has not yet been affected in major manner. Actually, MBAs are oblivious of the world around them till placements get affected!” said a member of the admissions committee at the institute.
IMI - Delhi has recorded an increase of 2,500 from admissions in previous years with 10,000 applications being received for 2009-11 admissions. “A big factor behind this is that for the first time we closed our admissions before CAT. Nowadays, with CAT analyses available soon after the examination, people know exactly how much they will be scoring vis-à-vis cut-offs at Indian business schools. We closed our admissions before CAT because we wished that more students apply to IMI. Also, a lot of ranking surveys have a parameter of number of applications per seat and a high number of applications is necessary to score well in this regard,” explains Dr CS Venkatratnam, Director – IMI.
IMT - Ghaziabad and Indian School of Business – Hyderabad (ISB) are two institutes which have reported increases of ten percent and 40 percent respectively wherein the rise in application numbers is also influenced to an extent by a larger intake of students from 2009 onwards. At IMT the number of seats across its branches in Ghaziabad, Nagpur and Dubai has increased by eleven percent while ISB plans to ramp up its seat intake from 440 to over 500 students if not 560 which is what the institute claims to be seat intake for which the business school was initially planned. Interestingly enough at MDI – Gurgaon, the number of seats has increased from 180 to 240 from 2009 onwards but there has not been a significant increase in applications. The institute has received 25,000 applications for 2009-11 admissions which is a marginal 2,000 higher than the applications received for the previous year. “The reason behind this may be the fact that the last date to apply for MDI was a month or so earlier. It is also possible that since we have a relatively high cut-off requirement for admissions, the application number for MDI has stabilized,” comments Professor Subir Verma, Chairman – Post Graduate Program in Management at the institute.
“The number of students appearing for SNAP this year is 1,10,000. This is an increase of 20,000 from last year and in my opinion, this is an expected increase and not a significant number. As for whether the economic slowdown has impacted applications, that can be inferred only when the applicant pool is analysed and quality of students determined. Personally speaking, I do not expect any drastic change in admissions for this year,” says Professor KS Subramanian, Director – Symbiosis Center for Management and Human Resources Development – Pune (SCMHRD).
A spokesperson at Ma Foi Management Consultants commented, “Industry pundits as well as HR professionals feel that each and every industry vertical has been severely hit because of the economic slowdown. Students graduating from business school in 2009 will definitely have a tough situation at hand. The scenario will get much better in the next four-six months and drastically improve in two-three years from now. This is the best time to apply for admissions at a B-school. With the job market the way it is, people are not looking for jobs and hence they should certainly go ahead with their plans for MBA, enroll at a B-school, forget about placements for now and focus on the course curriculum at hand.”
The 2008-10 batch of students at top Indian B-schools such as IIM Ahmedabad and IIM Calcutta consists of an overwhelming 90 percent engineers. With placements at the IITs being severely affected and a lot of engineers not having planned for an MBA and relying on plum placements from IITs, how should the cream undergraduate talent of the country handle the situation? “The economic slowdown has resulted in lesser number of companies visiting campus and making lesser offers. Also, a smaller number of finance and consulting companies has taken part in recruitments and hired fewer students. The scene is dull as far as placements is concerned, on campus and off-campus. Notwithstanding this, it may be worthwhile for a student to take up a job rather than spend a year exclusively for CAT preparation and have a year’s gap in the resume. The placement process is slow this year and while it usually winds up in February, this year it may extend to March or April,” commented Lt Col (Retd) Jayakumar, Deputy Registrar - Training, Placement & Public Relations Office at IIT Madras.
“This is not the year to make deductions. Even if changes are identified, they may not be the ‘right’ changes. Next year’s admissions will make a lot of issues clearer. I look upon the slowdown in a positive light and firmly believe that some level of self-correction was required in the system,” concludes Professor Subramanian of SCMHRD, Pune.
