BTech and bust: Why Indians rush to be engineers when there are no jobs

Engineering students are seeing the degree as a path towards a government job as they regard it better in terms of security, starting pay and perks.

Six lakh information technology professionals are expected to lose their jobs over the next two three years, according to a forecast by a leading head hunter. Studies suggest that almost half of those who graduate from the prestigious Indian Institutes of Technology (IITs) take their skills to work in financial markets and consulting.

Students at Vaish College of Engineering, which is one of the oldest private engineering colleges in Rohtak.(HT Photo)

Has the great engineering dream died?

The answer, experts say, depends on what the 1.5 million engineers graduating every year dream of.

Conversations with students, faculty members and higher education experts suggest students don’t always sign up for engineering courses just to become engineers and to start designing new engines for cars, extending the lifetime of a battery, building the next big software giant or taking part in the “Digital India” programme. Most of them simply want a job — any job, and given a choice, a job with the government.

When the news of IT sector layoffs reached Rohtak, Dharampal Dahiya, 19, didn’t care. He has finished his second year in civil engineering and has been preparing for competitive examinations to get a government job. That is all he wants. And so do most of his classmates.

Dahiya travels 30 km everyday from his village Sisana in Sonepat to Matu Ram Institute of Engineering and Management, a private college in Rohtak. His father, a farmer, didn’t want him to follow in his footsteps, for agriculture is no longer a profitable occupation. His parents enrolled him in an engineering college, as friends and relatives suggested a BTech will ensure a “stable career”.

Sandeep Malik’s story is not very different. The 26-year-old from Rohtak finished his BTech in 2013 and became the first engineer in his family. “I couldn’t clear the National Defence Academy exam after Class 12. With my BTech background, I can possibly get a technical entry in the defence sector.” Like Dahiya, Malik took up engineering primarily to get a government job.

Their aspirations mirror that of India’s youth at large: the latest CSDS-KAS Youth Study, released in April 2017, found that 65% of Indian youth would prefer a government job; just 7% wished for a job in the private sector. The lure of a government job is obvious: job security, allowances and better pay at the entry level.

But how valuable is an engineering degree for a government job?

In retrospection, Malik says “not much”, as he explains the economics: “Engineering education costs around Rs 60,000 per year; a BA costs Rs 4,000-10,000. So you are spending four years, and around Rs 2.4 lakhs to get a BTech degree. BA is significantly cheaper and saves you a whole year, meaning additional time for preparation.”

Dahiya and Malik went to one of the thousands of private colleges that have sprung up in the country to fulfil the demand of engineering education. 3,288 engineering colleges exist under the All India Council for Technical Education (AICTE), more than double from the 1,511 colleges ten years ago.

On the other extreme, lie the IITs, the best that the country has to offer. But apart from the coveted civil services examinations, government jobs hardly figure on the list an IIT undergraduate.

Where do IIT grads end up?

Using 2013 placement statistics of IIT-Bombay, Milind Sohoni, a computer science professor at the institute, found that 45% of the BTech students took up jobs in finance and consulting, 24% in IT and 8% in FMCG and non-IT. Just 22% took up jobs in engineering and technology, which Sohoni argues is the most relevant sector to IIT-Bombay’s mandate and training.

This tells us that neither is working in technology companies a priority for students nor does an engineering degree guarantee a job.

Why the rush for BTech ?

One explanation is that a degree serves as a signal.

“Given the returns to and the costs of investing in education, individuals make rational investment choices with respect to education,” Michael Spence said in his 2001 Nobel Prize lecture. “Employers have beliefs about the relation between the signal and the individual’s underlying productivity,” he went on to say.

What this means is that employers use an engineering degree as a “signal” that the graduate is more talented and capable compared to those who don’t possess one, regardless of whether college education has any direct relevance or implication for the job being offered.

Economists like Spence say that “signalling” depends on both the institution one went to and the degree they possess.

In the Indian labour market, a professional degree like engineering, which is more focused on empirical ability than arts and humanities, has higher “perceived” economic returns.

But if everyone becomes an engineer, then the signalling function of the Btech degree falls, and employers have no way of distinguishing technically proficient professionals from those who are engineers simply in name.

Colwin Fernandes, chief technology officer of Opcito Technologies, says this has already begun. “Engineering graduates are completely lost. The whole idea is that people seem to be that they think they are entitled to a job. If you are unemployable, you are not competing in the IT job market,” he said.

Fernandes warns that the labour market is changing rapidly due to advances in automation technology. New jobs will come up, he said, but Indian engineers may not be able to take them up. “Layoffs will happen. Graduates need to make themselves layoff-proof.”