J. M. Clark wrote in the Journal of Political Economy, in October, 1927: “Knowledge is the only instrument of production that is not subject to diminishing returns”. So is the story of educational institutions in India that impart knowledge especially, where some aspiring and ambitious students thirst for it. The input is the human mind, the application of the intellect is the churning process and the output is knowledge. We, in India, have the best business schools but lack the globally accepted accreditation. And, while the financial legends like Lehman Brothers topple in the West, the Asian giants India and China are preparing for the next wave of prosperity with their culture of great foresight and moderate risks to get stupendous rewards.

The top business schools in India are few, though there are about 1700 and odd all over the subcontinent. But most of these schools have everything like a good infrastructure, curriculum, ambience, faculty, campus facilities like excellent libraries and canteens, and reputation for lucrative placements in good industries.  There is a lot of support from industrialists and even the Government because we are still falling short of managerial talent as India is a developing economy. Almost every company is expanding, diversifying and creating jobs in new locations. So we have to set-up more business schools with hyperactivity on many counts the main being getting closer to industry by matching their needs with specialized courses.

The best business schools are the four IIMS (Indian Institute of Management Studies) namely at Ahmedabad, Bangalore, Calcutta and Lucknow, the XLRI (Xavier Labour Relations Institute), at Jamshedpur, ISB (Indian School of Business) at Hyderabad, IBS at Hyderabad, MDI (Management Development Institute) at Gurgaon, IMT at Ghaziabad, S.P.Jain, Mumbai, Jamnalal Bajaj, Mumbai, Great Lakes, Chennai (Madras), again 2 more IIMS at Indore and Kozhikode, NITIE and NMIMS University at Mumbai, XIM at Bhubhaneshwar, IMI and IIFT at New Delhi and FMS University at Delhi.

The question is who gets admission to these top management schools. Out of the  2,50,000 or so (this number increases every year) students who compete for the entrance test called CAT (Common Admission Test), only about 5% get into the top schools. There are 3 parts to the CAT questionnaire. The first part deals with (QA) Quantitative Aptitude, the second is Data Interpretation (DA) and the third is Verbal Ability/Reading Comprehension. They give 90 questions that have to be answered in 150 minutes and the total marks are 360. Parents of the aspiring students spend thousands of rupees for the coaching class tuition fees prior to the CAT exam, so that their progeny get into the top management schools.

There are many other good management schools that have a bolder curriculum. For example Biswajeet Pattanayak, who is the  Director, Asian School of Business Management, Bhubaneswar, says that the demand of industries in terms of competency has undergone a sea-change, and they are looking for complete finished products with the capability of delivering from the first day of joining service. Hence orientation and induction have to be packaged with technical education to avoid wasting the time, money and energy of the recruiting companies. As such many industries in the service sector have come forward and established links with academic institutions for content and quality upgradation.

The rapid changes in the economic and business environment throw up new challenges to the business management students and make some of the things they study quite redundant. Even some of the faculty members are unfamiliar with various complex roles and the multi-dimensional demands of business and what exactly they have to deliver to the aspiring students. So summer internships with relevant projects compatible with the specialization of the students bring them closer to reality and the practical side of modern business management.

There are other business schools that have introduced executive education in their curriculum just like the top IIM Business Schools have been doing. These are Taxila Institute at Jaipur, Narmada College at Bharuch, Gujarat, Sambaram College in Bangalore and many others. Here they have introduced the one-year post-graduate programme for executives (PGPX). But the admission criteria in the top schools like the IIMS is the toughest in the world. The incumbents need minimum 10 years work experience and 750 GMAT (Graduate Management Admission Test) scores to get into the course that will cost around 20 lakhs. But the returns are good here and abroad.

Certain management schools have introduced twinning programmes whereby the students get two degrees and that too at a fraction of the original fee. Schools like MET (Mumbai Education Trust), Welingkar Institute of Management, K.J. Somaiya College, Manipal University and many more have introduced these twinning courses whereby the students study 2 years in India and 1 year at a foreign university. Professor and Dean of the Welingkar Institute of Management says that all this is about globalization. He says: "Twinning helps the students culturally and that is very important. Even universities abroad are encouraging students to visit India and China as these are the emerging markets.”

The irony is that there is a shortage of faculty and they sometimes get less remuneration than the bright students that are picked up from the various campuses. And the media hype about salaries of those recruited from top B-schools has raised expectations everywhere. Unfortunately in the current financial crisis emanating from the United States, there is less demand from the industries and even the salaries have been slashed. Investment banks are not the flavour anymore. Instead the focus is on sectors like media, entertainment, sports management and pharmaceuticals. But, over the years, a lot of confident MBAs resort to starting their own business even sidestepping very tempting pay packets. Actually speaking the management students are trained to do just that. Of course they have to take the risk but they get the satisfaction of becoming entrepreneurs. That is a special challenge the success of which brings a lot of satisfaction and joy to the student or students (sometimes 2 or 3 of them join to bring in more investment in the enterprise). 

In top business schools in urban areas the professors teach for about 20 hours a week but in rural areas it is sometimes more than 40 hours a week. Sometimes a manager of the local bank or an entrepreneur running a laundry or restaurant can be a guest lecturer. It offsets the shortage of the faculty and the students get a peep at the practical problems facing  business in India.

Though the faculty members do a good job in building intellectual capital in India and the alumni of our business schools perform very well here and abroad, yet there are some shortcomings according to A.T. Raman, like faculty effectiveness, technology use at campus, building effective learning ambience, websites, journal publishing, brand building efforts such as links with the alumni, invitation to corporate honchos to visit campuses and floating of national and international conferences.

The bottom line is that India turns out good managers and more schools are yet to be established even in smaller towns and cities as the supply is falling short of demand. But the present generation of managers do not find it as easy as their previous counterparts. Today managers have to use a lot of psychology and work themselves to set an example to their subordinates. It is called motivational management. At the same time they have to move with the times as gadgets and economic and business practices and priorities change faster than the colours of the chameleon.