The Business Of Coaching Classes Is Big And Lucrative

The news of the topper of civil services making it in the fifth attempt is more than commendable, as it shows the dedication of the person as well as his unrelenting perseverance. This will be a role model for several aspirants who want to make it to this most prestigious service or even a management, engineering or medical course. In fact, even the perseverance shown when pursuing the CA certification is analogous to this effort. Interestingly, as is normally the case, several coaching classes for the civil services have showcased their contribution to the success of candidates by advertising on the front pages of various newspapers.

A broader issue which is raised is that given the limited seats that are available for the courses or positions in the civil services, the number of years spent preparing for the same is very high. For example, almost 13 lakh candidates take the civil services preliminary examinations, with around 15,000 making it to the main examination. Further, a little less than 3000 are called for interviews for around 900-1000 positions.

These numbers will keep rising as a fresh set of eligible candidates join the fray and a large part of the set of candidates who have not been able to qualify take it again. The system allows them to do so 5 times with an age limit. Normally these candidates tend to work exclusively on preparing for the exams and rarely would be working elsewhere. While this may not be the case with other public examinations, the civil services endeavour is one which requires complete dedication and is hence not generally done on the side with a regular job.

There are around 3 lakh candidates who take the management examinations, which include CAT, NMAT, XAT, CMAT, etc. These could be working professionals or students of regular courses. There are 15 lakh candidates who take the JEE engineering exams, while another 15 lakh try for the NEET medical examination. Therefore, there is a large youth population constantly studying to improve its career choices in life. In these examinations, there are no restrictions on the number of times that a person can take the exam. Further, there is no upper age restriction, which means that until fatigue sets in, one can keep trying to pass them.

The biggest beneficiary of this system has been the myriad tutorial classes that have been established to coach students for these examinations. It has become an industry today with rather weak regulation. With the concept of online coaching classes catching on, the potential candidates have options, especially when it comes to time and location. In fact, the concept of housewives providing tuition to children for certain subjects in school has ballooned into a large industry but remains largely informal still.

The web sites of coaching classes for the civil services examinations reveal that the fees could range from Rs 1 to 3 lakhs for foundation courses, which can rise by another 25-50% when specific subjects are also opted for. This would start from the preliminary examinations and extend to the main examination. Some of the institutes also provide training for the interviews, which may not be very popular but are still opted for by some individuals who would not like to leave any stone unturned.

In the case of management examinations, the fees could vary between Rs 20,000 and Rs 1 lakh, depending on the module that is chosen. There are classroom sessions which are for a limited period of time. There are online classes besides correspondence courses with some in-person classes. There are interactive videos as well as exam sessions that could also be taken, which can cost between Rs 5000-20,000. Often the faculty are individuals who have passed the exam and take on the role of guides. Or, they could be permanent faculty who have vast experience in training students, who probably never made it to the corporate world or bureaucracy.

Engineering courses can have fees ranging from Rs 1-3 lakhs, depending on the stage when one starts the coaching, as this is often done once a student completes the 10th standard examination. The NEET exam coaching can start from Rs 5000 and go up to Rs 2 lakhs, again depending on the mode adopted and intensity of the classes.

Hence, the biggest beneficiary in this rat race, which has evolved over the years for getting into a professional course or the prestigious civil services, has been the coaching industry. Given that candidates who do not succeed in the first attempt may go through with the classes the second time before looking at other options, the flow of students is immense. The size of the coaching industry in India has been placed at around Rs 60,000 crore, which can double in 5 years’ time as more youth enter this stream.

The two demographic challenges that come up are the following: Given that a student who opts for any of these lines of careers spends multiple years in preparation, there is a loss of productive work life from the point of view of the nation. This holds more so as the potential candidates are otherwise well qualified to appear for these exams and are not a part of unskilled youth. This leads to a debate on whether there should be a restriction on how many times a person can take an examination. Probably for the professional course, one could be studying or working while taking multiple attempts, which may not, however, be a productive one. But for those who take the civil services, the trend has been to study full-time for the examination, which has an opportunity cost for the country, given that all those who take these exams would be better qualified in terms of performance at the college level.

The second issue is that with an explosion in the young population, there need to be more opportunities for them. There can be a case of the government increasing the size of the civil service, given the high level of premium attached to serving the nation. The government has already done a lot in terms of increasing the number of IITs and AIIMS in the country, which allows for more students to progress in their education.

As the population increases and the demographic pattern favours the youth, there will be progressively more competition for the limited vacancies in different fields. This is what will keep the tutorial or coaching business ticking for sure.

The author is Chief Economist, Bank of Baroda and author of ‘Corporate Quirks: The Darker Side of the Sun’. Views are personal