The quality of management education in the country could dip with merit taking a back seat, if this practice goes unchecked, caution experts.
A few weeks ago, the admission director of a Pune-based B-school received a strange unsolicited phone call from an 'admissions' consultant.
"I am willing to supply students to your institute for anywhere between Rs 15,000 and Rs 60,000 a student. I could reduce this if your institute accepts students in bulk," the consultant said.
The director was taken aback. He told the consultant he had no such need. However, he simultaneously made a few calls to his peers and realised this was becoming 'a practice which many B-schools, barring the top 40-50, are following to admit students'.
Test-preparing institutes and education experts confirm the trend.
They say many regional B-schools in the northern, north-eastern and southern parts of the country appear willing to admit students who were ready to pay a stiff fee to sidestep the admission criteria.
These new management schools charge anywhere between Rs 4,00,000 and Rs 6,00,000 for a two-year management programme and comfortably adjust the cost of such admissions with the fee they charge.
"There are hundreds of B-schools which have opened in the country. Considering these schools are new and do not have a placement record to lure students with, they have a liaison officer in place who approaches the coaching institutes and sometimes graduate colleges to get students.
"Many a times, if the students agree to pay the fee, written examination, GDs and personal interviews are compromised on," said a senior official from a south-based MBA test preparing institute.
Being one of the top test preparing institutes, he says he often receives calls from consultants and even B-schools, for such an arrangement.
The calls are only set to increase.
Consider these figures. The number of private management colleges in the country is swelling and expected to double over the next two years -- to 600 by 2012 from 300 at present, according to a report titled 'Envisaging Future of Indian Higher Education' by Associated Chambers of Commerce and Industry of India (Assocham).
"If the test-preparatory institute sends more than 10 students to a particular B-school, they also get certain discount on the deal. Because these institutes begin operations with a bigger class size, they try various means to get students in the school.
"Many B-schools directly go to graduate colleges and pay them a referral fee," says the director of a Delhi-based HR consulting firm.
Technical training organisations, which advocate job-oriented training say this is happening because the education system in the country is deficient in providing industry relevant job skills and is struggling to meet industry expectations.
Students are armed with a management degree but poor managerial skills resulting in being educated but unemployed.
"Relaxing the entry gate requirements further and admitting students on fees, will also result in non-meritorious students, with poor academic record get through, thus edging out meritorious students on the basis of their financial capacity.
"This is the problem the industry is already suffering from as the quality of managerial resources is declining and people have an MBA degree but do not have the skills to get jobs.
What would really have a positive effect on the employer is the induction of a vocational training component into the present education system," says Ashish Prasad, director and CEO, Indian Institute of Job-oriented Training.
IIJT offers short- and long-term courses in the areas of finance, information technology, retail and sales and marketing.
When contacted, an official of the All India Council for Technical Education (AICTE), which regulates technical education in the country, said the body was not aware of any such admission process in B-schools.
The regulatory body received 2,176 applications from various states and individuals this year to open technical institutes. Around 40 per cent of these applications were for management colleges while 30 per cent for engineering.
The remaining 30 per cent were for setting up colleges in architecture, pharmacy, applied arts and crafts, hotel management and catering technology.
In the last one year, AICTE received around 12,100 applications seeking approval for various technical courses. There are around 2,872 technical institutions across the country with an intake capacity of 10,71,896 seats.