August 21, 2009

Kota: The Cram Capital of India

Filed under: Economics,Education,Rajasthan — loggers @ 1:52 am

Because of its history as an industrial town with prominent factories, like JK Synthetics, Kota was an ideal breeding ground for IIT coaching classes. Engineering aspirants have always been abundant, and the city itself is conducive to study due to the lack of distractions relative to the metros. The market for IIT coaching classes thus developed and one Prof. Bansal soon began administering mathematics tuitions for the IIT-JEE. Soon after, Pramod Maheshwari of Career Point started physics coaching classes. In a matter of a few years, test training centers sprang up all over Kota. Bansal and Maheshwari had the first mover advantage and developed a brand which attracted IIT hopefuls from across the country because they maintained a robust success rate. Since the criteria for admission into these classes were strict, they attracted the best of the best and a sample selection bias perpetuated their distinction.

We met Mr. Pramod Maheshwari and Mr. Pramod Bansal, CEOs of Career Point and Bansal Classes respectively and sought their thoughts on the history and prospects of the test training industry.  Mr. Maheshwari explained to us that education cannot be tested like a product; as a result ‘believability’ drives a customer’s decision to enroll in coaching classes. According to him, it is an industry that runs on trust. Coaching centers in Kota have managed to build and retain this trust but the city faces the risk of losing its charm if other educationalists build similar ‘believability’ elsewhere.

For both promoters their selection policy of admitting the best performing applicants (on their own entrance tests) into their academies justifies their success rate. As both firms began growing their capacity, they automatically lowered the bar for admissions, resulting in lower success rates. This strategy helped them prevent their competitors from becoming cash rich. Surplus cash would enable competitors to poach faculty members, the firms’ most valuable assets. Therefore, it seems that this model is not very scalable. As larger number of admissions will lower performance rates and plateau the growth of these firms, their reputation for excellence will also diminish.

Our conclusion: Kota is not a knowledge-development center. It is a site for test-prep and assistance in gaining admission into top-tier engineering colleges. In most cases, IIT aspirants do not need to enroll in the coaching classes because the Bansals and Career Points only admit applicants who they believe would get into IIT anyway. To their advantage, they exploit the rigid Indian parental tendency towards pushing their children into engineering/medicine colleges.


1 Comment »

  1. How did you manage to avoid “the rigid Indian parental tendency towards pushing their children into engineering/medicine colleges.”? did you encounter pushing into a direction at all?

    the best performing applicants will benefit the least from the test-prep. why would the admit the prep course at all?

    other model adopted by this industry (which is scalable) is to improve the performance of an applicant relative to her entrance test. if those skills can be improved upon everybody should get into a better school than the one that would accept them prior to the course.

    Comment by Aviad — August 21, 2009 @ 7:46 am | Reply

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