Over a year after credit rating agencies launched their rating for B-schools and engineering colleges, these still struggle to find takers. The detailed information sought by these agencies to grade B-schools is a deterrent for these institutes, say industry experts.
“Most of these agencies look at placement audits as a criterion for ranking B-Schools. This has not gone down too well with many B-Schools, especially those in the Tier II category,” says the vice-chairman of a Kolkata-based business school.
At Care ratings, D R Dogra, managing director, says, “It is a slow moving process. Among the institutes rated, three business schools have accepted the ratings. The ratings for engineering institutes have not been published yet. We are in the process of publishing it.”
Dogra believes it will be a difficult process unless more institutions get their gradings done. Care will be targeting all institutes with this product.
Credit rating agencies — Crisil, Care and Icra — began rating B-schools and other technical institutes last year to diversify their revenue streams. Also, since there was no internationally accepted grading of institutes done in India, there was a need to have gradings for them, too.
Icra has rated 13 business schools so far, of which seven have accepted the ratings. The agency is in discussions with the others. Rohit Inamdar, senior vice president and co-head, corporate s sector ratings, Icra, explained, “We have, more or less, got an encouraging response from the institutes. Some have accepted our ratings, while the others have not. The acceptance will happen gradually.”
Though Inamdar did not divulge the reasons for these institutes not accepting the agency’s ratings, industry experts said these B-schools want to bargain for a better rating.
“Several B-schools do not have the required infrastructure. Except for the top 30-40 B-schools, you cannot expect the others to have good infrastructure, faculty pool and placement record. They know their grades will suffer for sure,” said the director of a Delhi-based management institute who has actively been involved in accrediting B-schools through the National Board of Accreditation (NBA), constituted by the All India Council for Technical Education (AICTE).
The institutes say there are some initial hiccups with the process. The head of a Pune-based institute, which was recently graded by an agency, felt that the fee was definitely on the higher side. “We did ask for discounts, but we had to finally pay a large amount as fee. Though the grading process was genuine, we feel the team size conducting this process must be increased to reduce the time taken for it. Also, the fee charged by the rating agencies must be reduced,” said the director of the institute.
Akash Deep Jyoti, director, CRISIL Ratings, is quick to justify. “The fees for grading are reasonable and acceptable by industry standards. In fact, the lack of preparedness for grading is the bigger issue for the institutes that have not yet opted for the rating.”
Jyoti adds, “The overall quality of management education needs to be realigned to meet demands of the corporate sector. Second, with wide disparity in quality, there is a need for enabling differentiation and benchmarking for individual institutes. We take care of these issues through the gradings.”
Crisil has rated around 50 institutes in two categories, national and state-level, and between B (lowest) and A*** (highest). Icra rates B-schools from Icra EB5 (lowest) to Icra EB1 (highest), and engineering schools from Icra EG5 to Icra EG1.
These rating agencies do not rate education institutes outside India. At present, in India, the accreditation process is conducted through two government-run accreditation bodies — the National Board of Accreditation (NBA), constituted by the All India Council for Technical Education. and National Assessment and Accreditation Council (NAAC), an autonomous institution established by the University Grants Commission.
There are, however, some premier B-Schools which feel that ratings by credit rating agencies as a concept is good, and should not be used by institutes merely as a tool to advertise their institutes. Debashis Chatterjee, director, IIM Kozhikode, says agencies should use the right yardsticks and tools for grading the institutes.
“One cannot compare a new school with a 50-year old school. Ratings are good, as long as one understands what is being measured and how it is measured. The grading should be done only by agencies that understand the dynamics of the education system,” he said.
Rating agencies, however, believe the positive effects of the rating process will mar all the criticism about the process. “Once this process is widely established and recognised, all stakeholders, ranging from students, parents to recruiters, will consider these ratings as a crucial factor. Institutes will have to engage with us for a longer period to understand the process and get a better rating,” says Inamdar.