IIT CAT 2013: Hard lessons for private coaching centres

The proposed common admission test format for the Indian Institutes of Technology (IITs) and National Institutes of Technology (NITs), could prove to be a damper for the Rs. 10,000-crore (Rs. 100 billion) coaching industry.

Come 2013, the existing marking system will be replaced with one where the focus will be on the performance at the board exams. Candidates will be chosen, based on their ranks in the board exams and the number of students who appear for the exam under the concerned board. “For example, a student from CBSE would get more points for being ranked fourth, than a student from the West Bengal Board,” said Gautam Barua, Director, IIT Guwahati.

At present, IIT aspirants appear for the IIT-Joint Entrance Exam (IIT-JEE), which takes into account a student’s capabilities in physics, chemistry and mathematics (PCM). Board exams or class-XII results do not play a role in the final marking system. A student has to, however, score a minimum 60 per cent to qualify for the examination. Over 1.5 million students appear for the exams every year.

He said the idea behind changing the exam format “was to strike at the root of the coaching system that has gripped the country”. “We want these coaching classes to be transformed into schools,” he said, adding that the new format will encourage students to earn merit at the Plus-2 level. “The best way to do it, would be by encouraging students to perform better at the board exams.”

Coaching centres will, therefore, have to change their approach, said experts. For instance, Gautam Puri, Managing Director of Career Launcher, one of India’s better-known coaching institutions, said students will focus more on the overall package of subjects rather than just the PCM combination. “The way students prepare for the exams will change. Instead of focusing on the PCM, they will study everything. It will directly impact residential coaching institutions, which offer the code for cracking the earlier PCM-based exam. This kind of a coaching system will not be needed for just an aptitude test.”

At present, there are three types of examinations to apply for an engineering course — the IIT JEE for IITs, the All India Joint Entrance Exam (AIJEE) for other government engineering colleges besides the IITs, and the state board engineering exams for state engineering colleges.

The residential coaching programmes that Puri refered to are estimated to be a Rs. 400-500 crore (Rs. 4-5 billion) industry in Kota, a small town in Rajasthan, with a burgeoning student population. Over 70,000 students arrive in Kota to prepare for the entrance exams. While coaching institutions like the Forum for IIT-JEE chose to downplay saying it is too erealy to pass a judgment on the potential impact of the change, others like Pramod Maheshwari, MD and CEO of Kota-based Career Point, echoed Puri’s views.

“Now that Class XII board exam marks will also be taken into consideration, there will be a lot of competition to secure good marks in these exams. In this case, expert coaching will still be there. But, though the coaching modules would be modified as per the requirements, I believe there the business would be affected temporarily,” said Maheshwari.

Others, however, said the new exam format will merely mean a change in the coaching syllabi. “The analysis that students study only for the exam and not for their boards is incorrect. Over the past five years, the average IITian has a board exam percentage of over 80 per cent. Good students will continue to look for help. As long as that happens, it will be business as usual,” said P K Bansal, CEO, Bansal Institute. Kota-based Bansal Institute gets over 12,000 students every year an average and the annual fees per student is Rs. 70,000.

The idea behind the change in the format, which was taken at the meeting of the IIT Council last week, was to curb the growing coaching culture. Terming the coaching system as a “racket”, Sanjay Govind Dhande, Director, IIT Kanpur, had observed that the entrance examination system had to change.

Source: Business Standard, September 29, 2011

Mumbai calling: Harvard provides the answers

US-based Harvard University has, in principle, agreed to partner with the Maharashtra government to provide training for its elected representatives, bureaucrats, executives and academicians on issues relating to governance and development. This will be the first time Harvard University has agreed to be part of such a venture in Maharashtra. The university expressed its desire in this regard during its recent interaction with a high-level delegation led by Maharashtra’s minister for higher and technical education Rajesh Tope.

Sanjay Kumar, higher and technical education secretary, who was part of the delegation, told Business Standard: “We kept all four proposals for consideration of Harvard University which include training for elected representatives, propelling of a quality research programme in Mumbai University and other universities in Maharashtra, and the university’s engagement in the development of a world class traning institute and using its expertise in the resource mobilisation for the education sector.”

With Harvard University giving an “in principle approval” to take part in the project, the government will submit a detailed proposal which will be cleared by the university’s board of directors. He said the state government would provide the necessary funds for the same.

Harvard University has also agreed to be associated in a capacity-building exercise for Mumbai University and other institutions in the state. “The objective is to build capacity of the stakeholders in higher education, including vice chancellors and academician administrators,” said Kumar. According to Kumar, Harvard University also responded positively to help the state government in setting up a world-class training centre. “Harvard University’s in-principle approval is the result of the government’s regular interaction with its officials.”

The move comes at a time when the Centre is yet to pass the Foreign Education Bill which would allow foreign universities to have campuses in India. Union human resource development minister Kapil Sibal had tabled the much-awaited Foreign Education Institutions (Regulation of Entry And Operations) Bill, 2010 in the Lok Sabha on May 3, 2010. The Bill is aimed at regulating the entry and operation of foreign educational institutions which are imparting, or intend to impart, higher education in India. It will also permits foreign education providers to set up campuses in he country and offer degree courses. The Bill will not only bring in the much needed investment in the education sector, but will also draw foreign students and help India arrest brain drain.

Harvard has had a long association with India. Harvard Business School, for instance, has been conducting executive education or management development programmes in India since 2008, but out of five-star hotels. It has also been planning to have a classroom of its own for its executive education programmes. Indian corporate honchos, including Ratan Tata and Anand Mahindra, were reported to be helping the top institute find one.

HBS, which is ranked higher than all Indian B-schools, is looking for a permanent classroom is and that is likely to put more pressure on executive education programmes offered by Indian B-schools. On an average, such programmes comprise around 35 per cent of the revenue stream for most leading B-schools in the country.

Source: Business Standard, September 29, 2011

Higher education subsidy plan misses target

An ambitious scheme to make higher-education loans more attractive to poor students has failed to achieve its target because of inadequate marketing and the lack of coordination between various agencies.

The scheme was launched in 2010 by the Ministry of Human Resource Development (MHRD) and gives full interest subsidy (a student will not have to pay the interest for the loan he or she avails) to students from families earning less than Rs. 450,000 a year. The interest subsidy is valid for the length of the course the student is enrolled for as well as a moratorium of either one year or six months after employment, whichever is earlier.

An HRD ministry document says that only 40% of the budgeted amount was used in FY2011. “In the previous financial year, a total of claim of sum of Rs. 203.28 crore (Rs. 2.03 billion) was reimbursed to Canara Bank​ out of the total budget of Rs. 500 crore (Rs. 5 billion),” says the document, a copy of which has been reviewed by Mint.

Canara Bank is the nodal agency for the subsidy scheme, following a decision by the Indian Banks’ Association (IBA). Other banks lending to students under the scheme can claim the subsidy from Canara Bank, which in turn gets reimbursed by the MHRD. The MHRD has allocated a budget of Rs. 640 crore (Rs. 6.4 billion) this fiscal for the subsidy scheme.

“Proper utilization of the fund requires coordination among banks, state governments and the MHRD,” the ministry note added. A MHRD official said the scheme has not received enough attention because of poor awareness and lack of support from banks and state governments. “Till recently less than 15 states have notified a designated authority who can give students an income certificate,” the official said, requesting anonymity. He refused to name the states. The official added that though interest rates on education loan are higher than those for vehicle and home loans, some banks hesitate to sanction education loans, branding them “risky”. Another official in the MHRD said the ministry has informed the finance ministry and IBA about this and “hopes to see a better result by the end of this year”.

India wants to increase its higher education enrolment by nearly 30 million in a decade. Currently around 15 million studying for college degrees in India, around 12.4% of those eligible. Of these, less than one-tenth take student loans, according to official data.

Geeta Bhukal, education minister of Haryana, said the scheme is good but it needs wider publicity. “Many don’t know how to avail (of the loans). The publicity has to be much more prominent,” she said. However, the minister said that she is not sure whether her state has notified any designated authority for the scheme or not. “I need to check it.” An official with Central Bank of India​ said that many states are yet to notify a designate authority for issuing the income certificate, which is posing problem. “It’s a cumbersome process to lodge claims as all the data has to be collated from all the branches by the central office and then passed to Canara Bank,” he said, requesting not to be named as he is not authorised to speak to media.

A Canara bank official, who too did not want to be named, said the figures are provisional as they had given banks’ time till 31 August to claim the subsidy. “We are providing sufficient publicity but the main issue is that many of the states are yet to notify the authority who can issue the income certificate to the eligible candidates”, he said. “We are still collating the data and the final amount could be more than Rs. 200 crore (Rs. 2 billion)”, he added.

A finance ministry official said his ministry has asked “banks to promptly inform loan seekers meeting the income criterion that they are eligible for the subsidy. Most banks are doing it. But there are a few instances where this is not happening.”

Source: Mint, September 29, 2011