The number of applicants for CAT 2013 has dipped to a seven year low, indicating that an MBA degree has fallen from grace in the backdrop of a dull economy, escalating costs and uncertain placements. Only around 1.96 lakh vouchers have been sold for this year’s common admission test to 13 of the premier Indian Institutes of Management (IIMs) and 120-odd non-IIMs, marking a nearly 33% comedown from a high of 2.9 lakh in 2008.
Till September 26, the last day of online registrations, 1,96,095 vouchers had been sold, said CAT 2013 convenor Rohit Kapoor of IIM Indore. Registrations for the test closed at 1,94,514.
The last time CAT had seen such few takers was in 2006, when some 1.91 lakh students had appeared for the test. Ironically, the lower interest comes at a time when IIMs have added 115 seats, taking the tally across these 13 institutes alone to a total of 3,335. The IIMs and test-conducting firm Prometric had been preparing for more students to appear for CAT 2013 — to be conducted from October 16 to November 11, 2013 — with the test centres spread across 40 cities against 36 last year.
Despite a greater number of seats, interest from candidates seems to be waning, with an MBA degree no longer seen as guaranteeing a good job. “At one time, an MBA was perceived to be the ticket to a good job and a good life,” says Amitabh Jhingan, partner, Transaction Advisory Services and National Sector Leader – Education, EY. “That story hasn’t played out.”
He says that a number of MBA institutes which have sprung up are not providing students any jobs. Some of those have even wound up. “At the top 10-20 institutes though, there is unlikely to be a drop in interest or a lowering in cut-offs,” says Jhingan.
Agrees Anindya Sen, dean (academic) at IIM Calcutta: “There was a time when it was all about the craze for an MBA degree. Now that is changing.”
Students realise, he adds, that other than at a handful of Bschools at the top, the expenses of acquiring a management education are not worth it in terms of the returns. “On the supply side too, a lot of Bschools have closed down. This is a market correction of sorts,” he says.
IIM Indore’s Kapoor, who in some reports had been attributed to be expecting voucher sales of 2.5 lakh-plus, says: “The decline in registration numbers doesn’t bother us because 1.93 lakh is itself a huge number and this time round, we will have more serious and focused candidates sitting for the exam,” he says. “The reasons for the decrease in numbers may be varied — the economy, job market and other such issues may have deterred many from applying for the test,” said Kapoor.
The MBA boom spawned the rise of a spate of second-rung B-schools.
When the market was good and jobs were plentiful, every institute kept increasing its fees. But as economic conditions worsened and so also the job market, placements of students became tough. Despite the schools’ inability to place students, they didn’t lower their fees. (The Economic Times)