Business is booming in India’s US$117 billion education industry, and new colleges are popping up at breakneck speed. Yet thousands of young Indians are finding themselves graduating with limited or no skills, undercutting the country’s economy at a pivotal moment of growth.
Desperate to get ahead, some of these young people are paying for two or three degrees in the hopes of finally landing a job. They are drawn to colleges popping up inside small apartment buildings or inside shops in marketplaces. Highways are lined with billboards for institutions promising job placements.
It is a strange paradox. India’s top institutes of technology and management have churned out global business heads such as Alphabet CEO Sundar Pichai and Microsoft CEO Satya Nadella, but at the other end of the spectrum are thousands of small private colleges that do not have regular classes, employ teachers with little training, use outdated curriculums and offer no practical experience or job placements, said more than two dozen students and experts who were interviewed by Bloomberg.
Illustration: Mountain People
Around the world, students are increasingly pondering the returns on a degree versus the cost. Higher education has often sparked controversy globally, including in the US, where for-profit institutions have faced government investigations. Yet the complexities of education are acutely on show in India.
India has the world’s largest population by some estimates, and the Indian government regularly highlights the benefits of having more young people than any other country.
However, half of all graduates in India are unemployable in the future due to problems in the education system, a study by talent assessment firm Wheebox showd.
Many businesses say they struggle to hire because of the mixed quality of education, which has kept unemployment stubbornly high at more than 7 percent, even though India is the world’s fastest growing major economy. Education is also becoming an outsized problem for Indian Prime Minister Narendra Modi as he attempts to draw foreign manufacturers and investors from China.
Modi has vowed to create millions of jobs in his campaign speeches, and the issue is likely to be hotly debated in the run-up to national elections next year.
“We do face a challenge in hiring, as specific skill sets required for the industry are not currently easily available in the market,” MG Motor India human resources director Yeshwinder Patial said.
The complexities of the country’s education boom are on show in cities such as Bhopal, a bustling metropolis of about 2.6 million in central India. Massive billboards with private colleges promising young people degrees and jobs are ubiquitous.
“Regular classes & better placements: need we say more,” one such advertisement says.
Promises like this are hard to resist for millions of young men and women dreaming of a better life in India’s dismal employment landscape. Higher degrees, once accessible only to the wealthy, have a special cachet in India for young people from middle and low-income families.
Students interviewed by Bloomberg cited a string of reasons for investing in more education, from attempting to boost their social status to improving their marriage prospects and applying for government jobs, which require degree certificates from applicants.
One Bhopal resident, twenty-five-year-old Tanmay Mandal, paid US$4,000 for his bachelor’s degree in civil engineering. He was convinced the degree was a pathway to a good job and a better lifestyle. He was not deterred by the fees that were high for his family, which has a monthly income of only US$420.
Mandal said that despite the cost, he ended up learning almost nothing about construction from teachers who appeared to have insufficient training themselves.
He could not answer technical questions at job interviews, and has been unemployed for the past three years.
“I wish I had studied from a better college,” Mandal said. “Many of my friends are also sitting idle without a job.”
He still has not given up. Even though he did not find his degree useful, he wants to avoid the disgrace of being unemployed and sitting idle. So he has signed up for a master’s degree at another private institution because he believes more degrees can at least enhance his social status.
In the heart of Bhopal is a bustling market with institutes training for civil services, engineering and management.
Students said they had enrolled in these courses to upgrade their skills and boost chances of better career opportunities after regular degrees did not get them the jobs of their choice.
One of Bhopal’s educational institutions came under a particularly sharp spotlight in the past few years because it was involved in a case that went all the way up to India’s highest court.
In 2019, the Indian Supreme Court barred the Bhopal-based RKDF Medical College Hospital and Research Centre from admitting new students for two years for allegedly using fake patients to meet medical college requirements. The college initially argued in court that the patients were genuine, but submitted an apology after an investigative panel found that the purported patients were not really sick.
“We have noticed a disturbing trend of some medical colleges in projecting fake faculty and patients for obtaining permission for admission of students,” the court said in its judgement.
The medical college did not respond to request for comment.
The medical school is part of RKDF Group, a well-known name in central India, which has a wide network of colleges in areas from engineering to medicine and management.
The group faced another controversy last year. In May last year, police in the southern city of Hyderabad arrested the vice chancellor of RKDF Group’s Sarvepalli Radhakrishnan University, as well as his predecessor, for alleged involvement in giving out fake degrees.
Still, students could be seen flooding into several of RKDF’s institutions in Bhopal. One branch had posters of their “Shining Stars” — students who were placed in jobs after graduating.
Sarvepalli Radhakrishnan University and other RKDF-owned institutions did not respond to multiple requests for comment.
On its Web site, the group says it provides quality education through teaching and imparting practical skills, while making an effort to provide strong infrastructure and facilities.
Elsewhere in Bhopal, another college is operating out of a small residential building. One of the students who studied there said it was easy to secure admission and get a degree without attending class.
India’s education industry is projected to hit US$225 billion by 2025, up from US$117 billion in 2020, India Brand Equity Foundation data showed.
That is still much smaller than the US education industry, where spending is estimated to be well above US$1 trillion.
In India, public spending on education has been stagnant at about 2.9 percent of GDP, much lower than the 6 percent target set in the government’s new education policy.
The problems at colleges extend across the country, with a string of institutions in various states drawing official scrutiny. In some parts of India, students have gone on hunger strikes protesting the lack of teachers and facilities at their institutes.
In January, charges were filed against Himachal Pradesh-based Manav Bharti University and its promoters for allegedly selling fake degrees, a news release from the Indian Directorate of Enforcement said.
Manav Bharti University did not respond to request for comment.
While institutions publicize campus placement to students, many are not able to fulfill the promise. In 2017, one institution in the eastern state of Odisha gave fake job offers during campus placements leading to protests by students.
Anil Swarup, a former secretary in the Indian Department of School Education and Literacy, estimated in a 2018 article that of 16,000 colleges handing out bachelor’s qualifications for teachers, a large number existed only in name.
“Calling such so-called degrees as being worthless would be by far an understatement,” said Anil Sadgopal, a former dean of education at Delhi University and a former member of the Indian Central Advisory Board of Education, which guides the federal government. “When millions of young people are rendered unemployable every year, the entire society becomes unstable.”
All that is a challenge for big business.
One study by human resource firm SHL found that only 3.8 percent of engineers have the skills needed to be employed in software-related jobs at start-ups.
“The experience of everybody in the IT industry is that the graduates need training,” said former Infosys chief financial officer Mohandas Pai, a board member and cofounder of private equity firm Aarin Capital.
Pai said that one company owned by Aarin Capital “trains a lot of people for banking. They are not job ready, they need to be trained.”
Even though companies are looking to recruit in areas such as electric vehicle manufacturing, artificial intelligence and human-machine interface, the smaller Indian universities still teach outdated material such as the basics of internal combustion engines, Patial said.
“There is a gap between what the industries are looking at and the course curriculum they have gone through,” he added.
India has regulatory bodies and professional councils to regulate its educational institutions. While the government has announced plans to set up a single agency that would replace all existing regulators, that is still at the planning stage.
The education department did not respond to a request for comment.
The Modi administration is also trying to address the shortcomings in the education sector in its 2020 education policy, committing to improve the quality of its institutions.
It has also begun the process of allowing leading foreign universities to set up campuses and award degrees in the country.
Meanwhile, finding work for this generation remains a challenge.
Unemployment is a ticking time bomb, because close to one-third of the nation’s youth are not working, studying or under training, World Bank data showed.
Some are getting drawn into crime and violence. Last year, angry young people facing bleak job prospects blocked rail traffic and highways, even setting some trains on fire.
Pankaj Tiwari, 28, said he paid 100,000 rupees (US$1,218) for a master’s degree in digital communication because he wanted a job and higher status in society.
That was a big outlay for his family, which has an annual income of 400,000 rupees. Although his college had promised campus placements, no company turned up and he is still unemployed four years later.
“If I had received some training and skills in college, my situation would have been different. Now, I feel like I wasted my time,” Tiwari said. “I just secured certificates on paper, but those are of no use.”
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