MBA Coaching Classes In Smaller Towns: Financial Difficulties And Craze

Dhanashree Shetge works as a domestic help in multiple houses in the Kolshet area of Thane, a neighbouring district of Mumbai. She earns a cumulative salary of Rs 10,000 a month. Once home from work, she prepares “Chinese bhel” – a mixture of fried noodles, raw cabbage, raw onions liberally splattered with soy sauce and red chilly paste – in her one-room tenement.

Her husband, Prakash, sells the bhel at a nearby road-side market and earns about Rs 500 – 800 a day. This is not every day as often they do not have the money to buy the ingredients.
By night Prakash doubles up as a security guard in one of the housing complexes where his wife works. Prakash has chosen to work the nights as it pays a Rs 1000 extra. He earns Rs 9000 a month. They have three children – a college going and two daughters who are in middle school. Dhanashree has an auto rickshaw driver’s permit and owns a saffron-coloured one which is allocated only for women auto rickshaw drivers. She plies the vehicle in Thane from 4 p.m. to 8 p.m. She earns about Rs 800 – 1000 a day. There are days, sometimes extended periods, when she cannot ply the auto rickshaw.

Despite the meagre income, Dhanashree has enrolled her 17-year old son Ganesh in an MBA coaching class in Thane. “I have studied up to class 7 and my husband has failed in class 10. Without education, nothing is possible in life,” said Dhanashree to Outlook. “We live in poverty our children have seen only poverty. But I want to make sure that we can educate them so that they can become big officers. Someday people should salute my children too,” is the dream she hugs to bed.

To make this dream come true, Dhanashree has borrowed Rs two lakhs from one of her employers to pay for the coaching classes. She pays them back Rs 5000 every month. “I don’t know when I will be able to repay the money. My son will get a good job and he can then help me pay back the money,” she said. “My son has passed out of class 12. So far, due to reservation our children get free education. But this course is not free. He is a good student and his teacher told me to make him study MBA. He also told us that his friend runs a coaching class and will help us,” said Dhanashree.

Though life is very touch for them, the Shetges live in the hope that their son will lift them up from their poverty-stricken life. When Outlook spoke to Ganesh he seemed confident that he will get through the MBA entrance exams. He understands that the hopes of his parents impose too much pressure on him, but he has to pass the entrance exams.
“I know my parents have borrowed money to educate me. I have to pass the exams. Everything depends on me,” said Ganesh to Outlook.

Like the Shetges there are numerous others living in the smaller towns who are putting themselves into critical financial difficulties to enrol their children into MBA coaching classes. Born out of their aspirations is a whole economy of coaching classes for those seeking to do MBA. Given the craze in the smaller towns for a MBA degree, the market will continue to see a boom in the coming years, said an industry source.

“We are catering to a demand. We cannot price ourselves low because the competition is highly priced. We match the prices. We charge Rs two lakh for the coaching and it includes books too,” said a proprietor of one such class in Thane.

They operate out of everywhere - from shopping complexes, in the market areas, from shops in the dusty areas close to big bus stations and train stations. The advertisements are a lure and are splashed with photographs of students, who have secured high marks in the classes. Those in the know of the way coaching classes are run in the smaller towns reveal that they just put up photographs of students and often the marks are way below that mentioned in the advertisement.

Though there are government rules and regulations in place pertaining to the running of coaching classes, in reality there is no check on them. There is no governmental control exercised on the exorbitant fees charged by these coaching classes as often they are aligned with the local politicians. “Unless the local politicians are paid hefty amounts, it is difficult for any coaching class to operate in the small towns. Many times it is kin of politicians who own these classes,” said the source.

According to industry sources the economy of coaching classes is thriving, given the increasing demand and can be roughly pegged at an estimated Rs 900 – 1000 crores, nationally. “This market has seen an unbridled growth. Even during the Covid-19 lockdown the online coaching classes thrived. They did not reduce their fees but reduced the coaching hours. Despite the financial hardships families in these small towns faced the students in these classes did not see any fall,” said the source.

Dr Apoorva Palkar is the director – Innovations, Incubation and Linkages at the prestigious University of Pune. She was the chairperson for the Atman Test, which is the national aptitude test for MBA. Presently, Dr Palkar is the advisor to the Atman Test. “These coaching classes become mentors to those yearning to go to B-schools,” said Dr Palkar to Outlook Magazine. “The parents do not know anything about B-schools and depend on the advice of the teachers of the coaching classes. The shock is not the fees of the coaching classes, but the fees of the B-schools pointed out by these mentors,” said the educationist.

Since the past 8-9 years the smaller towns have also seen a proliferation of B grade and C grade business schools. “Many of the students are not intelligent enough to get into elite B-schools. Only about 3-5 per cent of the students get into these schools. The 95 per cent who have prepared for this will seek out B-schools in the smaller towns,” said Dr Palkar.

She strongly believes that there is a racket playing out between the B-schools and the coaching classes in the tier-2 and tier-3 towns. “There is a mushrooming of B-schools in these places. The captive audience is the students from these towns who are drawn to MBA and they are delivered to the B-schools by the coaching classes,” said Dr Palkar.

Like the Shetges there are lakhs of students who graduate out of the B grade and C grade business schools from the smaller towns and do not find any placements. “The trauma is when they do not find jobs in a course driven by placements,” she said.