Faculty Crisis Threatens Growth at India’s Top Business Schools

India’s top public business schools face a growing faculty shortage, limiting their expansion. Himanshu Rai, director of IIM Indore, cites challenges in recruiting domestic and international faculty due to evolving Ph.D. programs and government-regulated salaries. Despite rising demand—CAT exam registrations surged 30% in 2023—limited seats force many students to study abroad. IIM Indore is investing ₹4.3 billion to expand infrastructure and increase intake by 20%. The Indian government has opened seven new IIMs, but internationalization remains a key priority. Rai stresses the need for global engagement to enhance India’s education system.

CONTENT:

• Faculty Shortages Hold Back Growth at India’s Top Business Schools—Can They Keep Up?

Faculty Crisis Threatens Growth at India’s Top Business Schools

India’s leading public business schools are facing a significant challenge due to a shortage of faculty members, making it difficult for institutions to expand and meet the growing demand for management education. Himanshu Rai, the director of the Indian Institute of Management (IIM) Indore, pointed out that hiring qualified faculty, both domestically and internationally, remains a persistent hurdle.

Rai emphasized that while there is an increasing need for more faculty, the limited availability of Ph.D. graduates in India makes recruitment challenging. “Ph.D. programs in India are still in a developmental phase,” he explained. “We need more well-established doctoral programs to ensure a steady supply of qualified educators.”

Although IIM Indore currently has around 100 Ph.D. students, Rai admitted that this number is not enough to meet the institution’s needs. Another significant challenge is hiring international faculty members. While IIMs operate with a certain level of autonomy, they are bound by government salary structures, which often fall short of private sector and global standards. This salary limitation makes it difficult to attract top-tier international faculty, further restricting the institutions’ ability to expand and improve their academic offerings.

The establishment of IIMs dates back to the 1960s under the leadership of India’s first Prime Minister, Jawaharlal Nehru. Created alongside the Indian Institutes of Technology (IITs), these institutions were designed to foster excellence in business and management education. Over the years, the demand for such programs has grown substantially.

This increasing demand is evident in the rising number of students applying for management programs. In 2023, registrations for the Common Admission Test (CAT), the national entrance exam for IIMs and other top business schools, saw a 30% surge compared to the previous year, reaching 330,000 applicants.

Despite the high demand, gaining admission to an IIM remains an uphill battle. Across all 21 IIMs, there are only about 5,000 available seats each year, making the acceptance rate extremely low. Even with the presence of high-quality private business schools in India, the number of seats available is not sufficient to accommodate all aspiring management students. As a result, many Indian students look for opportunities to study business abroad.

A report from Applyboard highlighted that in 2021, business and management programs were the most popular choice among Indian students studying in the UK, with 44% opting for related courses. This trend indicates that a significant portion of students who do not secure a spot at an IIM prefer to pursue their management education overseas.

Rai acknowledged that the limited number of seats at IIMs is a major constraint to their growth. “Within an IIM, our ability to expand is restricted,” he noted. “Many students still prefer a traditional, in-person MBA experience, which limits how many seats we can offer.”

To address these challenges, IIM Indore has launched an ambitious expansion project worth ₹4.3 billion (£40 million). This initiative includes the construction of a new academic building, an incubation center for startups, and additional housing for both students and faculty. Once completed, the expansion is expected to increase the institution’s student intake by 20%.

In addition to institutional efforts, the Indian government has taken steps to expand access to management education. Under Prime Minister Narendra Modi’s administration, seven new IIMs have been established to cater to the rising demand. However, despite these efforts, Rai believes that expansion alone is not enough—Indian business schools must also focus on internationalization.

“In the past, we looked inward, assuming that external factors wouldn’t affect us,” Rai remarked. “But we have realized the value of engaging with global peers. Such interactions allow us to learn, adapt, and continuously improve.”

India, now the world’s most populous country, is both a vast market and a significant source of talent. Rai stressed that as a key global resource, India has a responsibility to ensure its education system meets international standards.

“Our goal should not only be to provide top-tier education for India but also to compete globally,” he concluded. “We must strive to make our management programs internationally competitive, equipping our students with skills that are relevant both nationally and globally.”

While faculty shortages continue to be a major obstacle, institutions like IIM Indore are actively working toward solutions, including expansion projects and efforts to attract international faculty. However, addressing these challenges will require sustained efforts from both educational institutions and policymakers to ensure India remains a leader in management education.

 

Faculty Shortages Hold Back Growth at India’s Top Business Schools—Can They Keep Up?

India’s top public business schools are facing a major challenge: a shortage of faculty that’s limiting their ability to grow. Himanshu Rai, director of the Indian Institute of Management (IIM) Indore, highlights that hiring both domestic and international faculty remains a significant hurdle.

“We need more and more faculty members, and it’s always a challenge because Ph.D. programs in India are still evolving,” Rai explains. He emphasizes the need for stronger doctoral programs to ensure a steady supply of qualified educators. Despite IIM Indore currently having around 100 Ph.D. students, he believes it’s still insufficient to meet demand.

Another obstacle is attracting international faculty. While IIMs have some autonomy, they are constrained by government salary structures, making it difficult to compete with private institutions and global opportunities. This pay gap makes it harder to recruit top-tier faculty from abroad.

Established in the 1960s under India’s first prime minister, Jawaharlal Nehru, the IIMs were designed to provide world-class business education alongside the Indian Institutes of Technology (IITs). Over time, the demand for management education in India has skyrocketed. In 2023, registrations for the Common Admission Test (CAT), the national entrance exam for IIMs, surged by 30% to 330,000 applicants. However, with just 5,000 seats available across 21 IIMs, competition remains fierce. Even with the addition of prestigious private business schools, demand far outweighs supply, pushing many Indian students to pursue business education overseas.

A 2021 analysis by Applyboard revealed that business and management courses were the top choice for Indian students in the UK, with 44% opting for related programs.

“We are limited in terms of scaling up,” Rai admits. Despite high demand, expansion is restricted by the traditional campus-based model that students still prefer for full-time MBA programs.

To address this, IIM Indore is investing in a ₹4.3 billion (£40 million) expansion project, which includes a new academic building, an incubation center, and additional accommodation for students and faculty. Once completed, Rai expects a 20% increase in student intake.

The Indian government has also been working to expand access to management education by launching seven new IIMs under Prime Minister Narendra Modi’s leadership. However, Rai warns against complacency.

“In the past, we looked inwards, believing nothing could affect us,” he says. But as India asserts itself on the global stage, he sees value in fostering international collaborations and learning from global peers.

With India now the most populous country, Rai believes it has not just the world’s largest consumer market but also its most significant talent pool. “If we are the world’s biggest resource, then it’s our responsibility to ensure that our education is not just nationally focused, but truly international.”