An engineering degree followed by an MBA is often been seen as the most successful career trajectory in India. This belief might be losing ground, shows an HT analysis of a National Statistical Office (NSO) report on education which was released in July. In fact, general courses such as humanities, sciences and commerce are now becoming more popular, a trend experts attribute to a growing gap between the skills professional degrees impart and what is needed in the job market.
The NSO released the findings of its 2017-18 survey on Social Consumption of Education in India last month. A comparison with a similar report from 2014 shows that management and engineering courses have seen the biggest proportionate fall in their share of students. For management, this has almost halved, while engineering has suffered a 22% decline. Science courses have registered the biggest increase during this period. Overall, general courses have seen a 6.3 percentage point increase between 2014 and 2017-18, while the share of students going to professional courses has declined by the same amount.
To be sure, engineering is the most popular professional course in India. According to the report, the share of students pursuing engineering courses is equal to the all other professional courses put together. The report lists these as: medicine, agriculture, law, management, education, chartered accountancy, IT and computer courses and courses from vocational training institutes.
The fall in share of engineering students should not be very surprising given the problems engineering colleges including the IITs have been facing. In December 2019, minister of education Ramesh Pokhriyal Nishank told the Lok Sabha that 128 engineering colleges in India closed down between 2016-17 and 2018-19. Even the IITs have been facing the problem of vacant seats. According to a written parliament answer on July 27, 2017, 3 IIT seats were vacant in 2014, 50 in 2015, 96 in 2016, and 121 in 2017. In 2018 too, 121 of 10,988 seats remained vacant, according to another parliament answer on April 5, 2018.
The answer also stated that the then Ministry of Human Resources Development (MHRD) has advised all centrally funded technical institutions “to review seats in each discipline based on employment opportunities, national requirements, available infrastructure and scope for future”. “New Courses and Disciplines may be introduced only after carrying out market opportunity analysis,” the reply added. No IIT seats were vacant in 2019 as a consequence of these efforts, according to a PTI report last year.
Statistics from the NSO report support these anecdotal findings. Both government and private unaided institutions suffered a fall in share of engineering students between 2014 and 2017-18. To be sure, more than half of engineering students still study in private unaided institutions.
What explains the fall in popularity of engineering, India’s most popular professional course?
A class-wise analysis offers useful insights here. While the share of students pursuing engineering has fallen across income groups, the fall is higher among those who are neither the richest nor the poorest. This can be seen from a quintile-wise analysis of students according to monthly per capita consumption expenditure (MPCE) classes. The share of students belonging to the bottom and top 20% pursuing engineering has fallen by 9% between 2014 and 2017-18. For the rest of the MPCE classes this is more than 20%.
Supply of engineering graduates getting ahead of demand, wage premium shifting in the market in favour of workers traditionally thought to be less skilled, and employers gradually recognising that a degree is not an indicator of the skills needed for the job could be reasons behind this shift, said Manish Sabharwal, chairman, Teamlease Services. “Wages in the past were a lazy filter for skills, but the fastest growing segment in the Indian market is sales, customer service, and logistics. Engineers who join there don’t feel that they get the wage premium there that they feel they should. But why should companies pay them higher wages if they don’t have the skills that they are looking for?” he said.
