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 Geometric had been preparing for more students to appear for CAT 2013 — to be conducted from October 16 to November 11, 2013 — with the test centers spread across 40 cities against 36 last year.
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,
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 are not lowering their fees.
Saddled with huge batch sizes and a slow job market, even the IIMs faced difficulty in placing the last 5% to 15% of their batches (ET, March 18, 2013).
However, in many of the older IIMs' cases, fees have gone up by three to four times from 2007-09 levels when they charged an average of Rs 4 lakh. For the Class of 2015, IIM Lucknow charges around Rs 10.8 lakh after a fee cut, while at the top end, IIM Ahmedabad and IIM Bangalore charge Rs 16.6 lakh and Rs 17 lakh, respectively.
One of the main reasons behind dwindling CAT registrations is return on investment (ROI)
Other options are also proving attractive to students. "Today, if you take GATE (Graduate Aptitude Test in Engineering), you can end up in a public sector company and get a decent starting salary Rs 10-11 lakh, There are students who are reluctant to pay Rs 16-17 lakh for an MBA. They prefer to work for some more time, save up and do an MBA from say an Insead, and get paid in dollars...
So what's the use of doing MBA by paying such a hefty amount.......
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