A Supreme Court (SC) ruling on April 25, 2013 could have long term implications on the business education regulatory landscape of India. The court, hearing a petition filed by a group comprising the Association of Management of Private Colleges and some Tamil Nadu-based private institutes, has taken away MBA (not PGDM) and MCA courses in India away from the purview of the All India Council for Technical Education (AICTE), deeming these courses to not be of ‘technical’ nature.

At present, MBA degrees are offered by government universities (University of Mumbai, Pune, Delhi and the likes) and deemed-to-be universities such as Narsee Monjee, Mumbai , Symbiosis International University, Pune, Indian Institute of Foreign Trade, Delhi, etc. But both types of universities will not be equally impacted by the SC ruling. AICTE plays a very small role at the deemed universities, where it can at most issue guidelines which a committee from the University Grants Commission (UGC) makes sure are implemented. AICTE’s role is, however, more significant at government universities where the council grants approvals and renewals to the programs every year, subject to the guidelines being followed.

The April 25 ruling effectively ends the stronghold of AICTE on government-run MBA courses after 13 years. Not needing approval from AICTE anymore, these universities can now take higher control of their MBA programs. Furthermore, AICTE’s role is now only of advisory nature and the council can only provide recommendations to the UGC.

The ruling also observes that the AICTE brought in the MBA and MCA courses under its ambit illegally in the year 2000, without having the amendments passed in the Parliament, which violates section 24 of the AICTE Act.

Is an MBA course ‘technical’?

At the core of the appelants’ argument is the question of whether an MBA is really a ‘technical’ course for AICTE to regulate it.

As a collateral effect of the ruling, several b-schools are now confused whether the PGDM too can be called technical, as it derives itself from the MBA course. If the PGDM too isn’t technical, then it too need not be vetted by the AICTE, is the argument at the center of the confusion.

The fate of the Common Management Admission Test (CMAT) also hangs in balance after the apex court ruling, as university-affiliated institutes offering MBA now need not use the AICTE-owned CMAT exam anymore. B-schools affiliated to government-run universities are still not too sure about the future course of action. When PaGaLGuY contacted Dr SK Mahajan who heads Maharashtra’s Directorate of Technical Education (DTE), he said that he was not sure of anything right now and would implement whatever his higher authorities ask of him.

Good, bad or ugly?

Private b-schools affiliated to universities are happy with this ruling. Dr M Prakash, secretary, Karnataka Private Post Graduate Colleges Association (KPPGCA) said, “AICTE had started interfering too much in the functioning of the colleges. They had brought in a renewal system for the courses the cost of which was raised from the earlier Rs 40,000 to about Rs 3 lakh per year. Moreover, the admissions also had to be through AICTE’s CMAT which has not brought satisfactory results for our state’s schools. Where Karnataka has 24,000 seats in management institutions, only 5,800 candidates have appeared for the CMAT in the state.” This might see many state associations restart previously discontinued exams. For example, the KPPGCA is already negotiating with the Karnataka government to conduct the Karnataka Management Aptitude Test (KMAT) in mid-July.

Dr (Capt) CM Chitale, head, Department of Management Sciences, University of Pune (PUMBA) also welcomed the decision. Dr Chitale said, “While it is too early to comment on the impact, I am happy that the SC has honoured the rule of the university and universities will now have the power to govern MBA courses independently.”

While some of the institutes are satisfied with the judgement, some fear that the verdict will hit the quality of MBA education in the country adversely. The director of an institute from the NCR region said on condition of anonymity, “If you take a look at university-affiliated b-schools across the country, only some of them associated with University of Mumbai and Delhi can really classify as good b-schools. Most b-schools in the country with the exception of the Indian Institutes of Management are run by private players. The already declining standard of education will go down further. UGC is not a very stringent body and wields a very indirect kind of control over university-affiliated MBA institutes. Also, considering the number of the institutes under the UGC, it will be difficult to monitor the management institutes closely.”

A similar view was echoed by Dr MA Khan, director, Sydenham Institute of Management Studies, Research and Entrepreneurship Education (SIMSREE), Mumbai which is affiliated to the University of Mumbai. “The value of the MBA degree will be diluted. There will be no difference between the regulation of the Bachelor of Management Studies (BMS) course and MBA as UGC will not be able to look after every issue concerning the b-schools.”

Another concern is that institutes will now have a free-reign over the conduct of the MBA programs. This might lead to the mushrooming of a lot of institutes offering sub-standard MBA programs. Also, the AICTE guidelines at least assured a minimum standard quality of education for students which can now be compromised without a direct regulator. This does not augur well for MBA aspirants in India, with b-schools already struggling with faculty hiring and placements.

View from the AICTE

Rakesh Dwivedi, the legal counsel who appeared on behalf of AICTE at SC said, “Our argument was that the colleges affiliated to universities are governed indirectly by these universities and hence are largely independent of them. In such cases, AICTE should prevail over the universities in governing the affiliated institutes. However, this did not stand.”

PaGaLGuY also contacted SS Mantha, chairman, AICTE, who informed that the council will file a review petition soon. When asked further about the impact of the ruling, Mantha said that he did not want to speculate

If you are an applicant gunning for an MBA seat at a government university in the academic year 2013-15, there is no need to hit the panic button yet. Our conversation with stakeholders reveals that the judgment will have no impact on the admissions this year and students may take the May CMAT as planned.

Read the entire judgement here.

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