Calcutta girl Arpita Kar cleared the WB joint entrance exam (JEE) for engineering with elan. Ranked 974th, she knew she could have bagged a seat in a top engineering college in the state. But she chose to opt out.

“I was lucky to have got into the Chennai Mathematical Institute. Maths offers much better prospects today,” says Arpita, who is pursuing a BSc in maths and computer science.

Sougata Nag secured 3,335th rank in IIT-JEE. That was enough to get him a seat at any of the top Indian Institutes of Technology. But he too decided against engineering and instead, joined the Indian Institute of Space Technology (IIST) at Thiruvananthapuram to study BTech. “After all, IIST is the gateway to the Indian Space Research Organisation. It was my dream to be a space scientist.”

Or take Amit Yadav, a bright BCom (Hon) student in his final year at Hans Raj College, New Delhi. Yadav has no plans to join a postgraduate course in business administration (MBA) after graduation. That’s because he’s seen many of his seniors bag lucrative jobs during campus placements. “A first class BCom has more value in the job market than an MBA from a B-grade B-school,” says Amit curtly.

Arpita, Sougata and Amit are among a growing tribe of students who are rejecting engineering and management for other courses. In fact, so widespread is the trend now that seats in many engineering and management institutes — and this includes a few of the IITs and IIMs as well — are lying vacant.

The numbers tell the story. Over 80,000 seats are going abegging in engineering and technology institutes in Andhra Pradesh, 55,000 in Tamil Nadu and 12,000 in West Bengal. In management institutes, there’re no takers for 24,700 seats in Uttar Pradesh, 7,000 in Maharashtra and 5,933 in Gujarat. In all, about 2,00,000 seats are lying vacant in engineering colleges and over 1,00,000 seats in B-schools across India.

According to Crisil Research, the average seat occupancy rate declined to around 67 per cent for engineering colleges and to about 65 per cent for B-schools in 2011-2012. Says Ajay Srinivasan, head, industry research, Crisil, “Low occupancy rates are making it difficult for many lower-rung colleges to sustain operations. A number of colleges face closure.”

Colleges are already on the edge. Till February 2012, the All India Council for Technical Education (AICTE) had received applications from 138 colleges, including management, engineering and MCA institutions, for closure. Many of these are in Uttar Pradesh, Rajasthan, Maharashtra and Andhra Pradesh. In June, the Kerala High Court, expressing concern over the quality of higher education in the state, directed the state government to take steps to close self-financing engineering colleges which had failed to perform in the last three years.

Clearly, the tier-II or tier-III institutes, without quality faculty or infrastructure, are facing the heat. They are being spurned not just by students but by recruiters too. That’s because the common perception is that they have failed to provide quality education and job-ready skills to their students. Says a senior HR head at Tata Consultancy Services (TCS), who prefers to remain anonymous, “There is no question of hiring an unemployable engineer. We steer clear of colleges which lack infrastructure or good faculty.”

According to another senior recruiter at a Bangalore-based IT firm, most graduates from engineering colleges and B-schools lack essential starting skills. Since outdated technology is taught in most institutes, companies lose time and money in training the graduates, says Nanda Kumar, head, customer services, Volvo Eicher, the automobile company.

Recruiters became choosy when the economic outlook became bleak in 2008. Says a recruitment consultant in Chennai, “There will always be a demand for engineers but in such a sluggish market we expect the grain to be separated from the chaff. Graduates from tier-II and tier-III colleges may not get jobs so easily.”

The discouraging placement scenario has, in a way, made prospective students and their parents more cautious. Says Premchand Palety, who heads Cfore, a firm that conducts B-school surveys, “In the last season half of the students didn’t get campus placements.” According to him, fee hikes have also affected B-school admissions as the return on investment — say, if one invests Rs 4 lakh on fees earns a salary of Rs 3 lakh in first job — factor got skewed abnormally.

In fact, for the first time in the last 28 years, the number of applications for CAT (the exam for B-schools) saw a drop last year. “The euphoria about grabbing an MBA degree among middle-class youth is almost over,” declares Harivansh Chaturvedi, director of Bimtech, a B-school in Noida.

Once, students would join any engineering or management institute. The demand for engineers and MBAs was so high that the number of B-school seats approved by the AICTE increased almost fourfold to 3.52 lakh in 2011-2012 from 0.94 lakh in 2006-2007, says Crisil. The number of seats in engineering colleges zoomed to 14.85 lakh from 5.50 lakh during the same period.

“Today, the supply is clearly outstripping the demand,” admits Professor V. Rhymend Uthariaraj, secretary, Tamil Nadu Engineering Admissions, a single window system for engineering admissions in the state. Palety points out that all top B-schools have increased capacity by 50 per cent. “AICTE permitted a 300 per cent increase in the intake of B-schools during 2007-2011,” Chaturvedi adds.

In Tamil Nadu, seats in engineering colleges are vacant because 30 new colleges sprung up last year, holds G. Vishwanathan, founder and chancellor, VIT University in Vellore. “Engineering is not losing its charm. We have just created more space and some students also drop out because they cannot pay the fees,” he says.

But it’s not just the lower rung institutes that are left with empty seats. Even the hallowed IITs and IIMs face a problem. According to an affidavit filed by the IITs in the Delhi High Court last year, 757 of 9,618 seats in the 15 IITs were not filled in 2011-2012. The situation is similar in the six new IIMs.

“We have around 1,345 seats,” says A.R. Mohanty, chairman, IIT, Kharagpur. “All seats were taken during counselling at the time of admissions this year. But when the session started we found 43 seats vacant.” Some of these were reserved for scheduled castes and tribes, and some were for “unpopular” courses such as ocean engineering or process engineering.

Clearly if they don’t get the college or the course of their choice, even the IITs and the IIMs fail to make the cut with students.

One reason many young people are moving away from engineering or management is that recruiters are putting a higher value on students from the fields of pure science, commerce and humanities. Graduates from top colleges are getting plum job offers at companies such as Google, IBM, TCS, and the Godrej group. This year, the highest salary package offered to graduates at the Shri Ram College of Commerce (SRCC), New Delhi, was Rs 16.5 lakh; at St Xavier’s College, Calcutta, it was Rs 12 lakh.

“Companies nowadays have realised that bright graduates bring more value to a company because their domain knowledge is very strong,” says P.C. Jain, principal, SRCC. “An MBA with an engineering background may be technically sound but he or she will have little knowledge of business. It makes better sense to recruit a person with an economics or commerce background.” Also, such graduates are usually more willing to learn and eager to do odd jobs like data collection or sales promotion and will have no unrealistic expectations of their job, he adds.

Further, companies need to pay much less to these recruits than to an engineer or an MBA. Another reason companies are keen to employ graduates is the retention factor. “A graduate will probably stick around with a company for more years than an MBA. He or she will be eager to gain some experience before moving on to the next job,” argues E. Balaji, managing director and CEO at human resources firm Randstad India Ltd.

According to P.T. Manoharan, former vice-chancellor of the University of Madras, students are also attracted to pure science courses these days because good jobs are available in government institutes. Agrees Abhijit Chakrabarti, a biophysicist at the Saha Institute of Nuclear Physics, “With better pay and facilities we are attracting good students. We’ve even been able to reverse the brain drain by luring doctorates from foreign labs.”

Mathematics has become another area of choice for students. “This is the golden era of maths,” says Rajeeva Karandikar, director of the Chennai Mathematical Institute. “The demand for maths students is rising sharply in industries such as software, biotechnology, financial services and banking. The sunshine areas of data mining will open up more opportunities for students.”

The writing on the wall is clear. Quantity alone is not enough; it’s quality that will help determine which institute will survive and which fall by the wayside.

Additional reporting by Kavitha Shanmugam in Chennai

VACANT SEATS

ENGINEERING

80,000 in Andhra Pradesh 55,000 in Tamil Nadu 14,000 in Karnataka 12,000 in Bengal

Note: 757 of the 9,618 seats in the 15 IITs were vacant in 2011-12, according to an affidavit filed by the IITs at the Delhi High Court

B-SCHOOLS

24,700 in Uttar Pradesh 8,000 in Rajasthan 7,000 in Maharashtra 5,933 in Gujarat

All figures for 2011-2012