As colleges go, Krutika Institute of Technical Education is certainly educative.

Located on the outskirts of Bhubaneswar, this private engineering college works out of a half-built red and cream building with iron rebars bristling from its top. The lobby stands unfinished with its girders exposed. Similarly unfinished, the water fountain in front is no more than a square pit filled with rainwater, with wild grass like the local white-topped kasatandi growing around it.

The college library is housed in a large hall that is mostly empty. Bookshelves stand at the far end, occupying a rectangular patch the size of a living room.

KITE, as the institute is known in Bhubaneswar, is a college whose plans have gone awry.

According to its faculty, the college was set up about five years ago in the hope of attracting 300 engineering students a year. However, it has been affected by an abrupt collapse in the demand for Odisha’s engineering courses. This year, 31,000 of the 46,000 BTech seats offered by government and private colleges in the state have stayed vacant. At KITE, just 30 students have joined the 2015 class, a faculty member revealed on the condition of anonymity.

Among private colleges, KITE isn’t even the worst off. By the end of the 2015 admissions, around 20 colleges – out of the 95-odd private engineering colleges in Odisha – failed to reach double digits in student intake.

In Odisha, it is hard to miss the fallouts of this crisis. In the town of Barpada, employees of the Bhadrak Institute of Engineering and Technology went on strike after not getting paid for four months. Associations of the aggrieved have sprung up. One for the private colleges. Another for the employees of these colleges. With the owners unwilling to put more money into their colleges, principals are hiring junior and inexperienced teachers. Starting salaries, said a member of the All Odisha Private Engineering Colleges Employees’ Association, have fallen as low as Rs 5,000. Colleges are asking lecturers to recruit students or face penalties.

The library of Krutika Institute of Technical Education.

A short-lived boom

In 2000, Odisha seemed to stand at the cusp of an education boom.

With the growth of the state’s IT and mining sectors, students were keen to enrol for engineering courses. Said Soumya Ranjan Patnaik, a former MLA and the editor of Oriya newspaper Sambad, “People thought that if they spent Rs 3 lakhs-Rs 5 lakhs on the education of their child, he or she would earn at least Rs 30,000-Rs 40,000 a month.”

In response, the state saw a steep rise in private engineering colleges. According to a former principal of several of these colleges, who spoke to on the condition of anonymity, Odisha, which had no more than five private engineering colleges across the state till 2000, added over 90 in the next ten years.

And then, suddenly, things turned turtle.

The standard explanation for the crisis is that students have lost interest in engineering. This, in turn, is attributed to the economic slowdown in the state. With engineering graduates struggling to find jobs, the demand for engineering courses has waned.

This, however, is an incomplete explanation.

Follow the money

In the last ten years, Odisha has seen more than one boom. Apart from the mining boom, the state also saw booms in gold, real estate, engineering colleges and chit funds.

Between 2000 and 2012, the number of gold and jewellery shops in the state spiked. There was a period when, said Rama Ballabh Rath, a former Biju Janata Dal leader, real-estate prices were doubling each year. In the same period – between 2000 and 2012 – the chit fund industry in the state exploded. Said Patnaik, “At its peak, there were 200,000 chit fund agents in Odisha – a state with 55,000 villages.”

This is not a coincidence. As the Shah Commission report on illegal mining noted, the mining boom generated a lot of unaccounted wealth. “What did people do with all the money they made in mining?” Patnaik asked. “The first thing they did is buy gold. And then, they went into real estate and land.”

This movement of money had two impacts, he explained. First, the spike in land and real estate prices catalysed a boom in chit funds. Operators began collecting deposits, spending some of it, and putting the rest in real estate. Second, some of the money heading into real estate found its way into education.

Why education, Scroll asked Patnaik. His family is one of the most well-connected in the state. His sister-in-law, Indrani, owns iron-ore mining leases while his brother, Niranjan Patnaik, used to be the head of the Indian National Congress in the state. Patnaik himself, apart from editing Sambad, is the son-in-law of former chief minister JB Patnaik. He has been an MLA and now heads a political party called Aama Odisha.

Once those benefitting from the mining boom decided to invest in land, said Patnaik, they gravitated towards education. Since they were not just buying land but building a productive asset in the form of a college, bank funding was available. It conferred respectability.

Further, buying land made it possible to convert black money into white – a part of the payment for a tract of land could be done using unaccounted funds, but its subsequent value would be shown as legal, for instance. At the same time, cash thrown up by the college would help repay loans. Even if the education business slowed, said Patnaik, the assets would rise in value anyway.

Within education, investments flowed into areas where returns were high while investments were relatively low. Said Rath, “Most of the investment flowed into engineering than medicine. Investment in a medical college is greater plus you need to invest in an hospital as well.”

In contrast, an engineering college taking in 300 students could sell 30 of those seats (10%) in the management quota each year. The faculty member at KITE explained: “If a college charges Rs 800,000 for a management quota seat, that would work out to Rs 2.4 crore each year. Apart from that, all 300 students pay Rs 50,000 as fees. Which works out to another Rs 1.5 crore.”

That is Rs 3.9 crores a year from the first-year students. Add to that, he said, the fees from the 2nd, 3rd and 4th year students and you have another Rs 4.5 crores.

How this adds up 

This calculus altered the contours of engineering education in Odisha.

One evening in September, two faculty members explained the rise and fall of engineering colleges in the state. One of them is the former principal while the other teaches at Orissa Engineering College, the first private engineering college to come up in the state.

Till the mid-’90s, they said, Odisha had just one private engineering college – Orissa Engineering College – and three government engineering colleges. Between these four, the combined student intake was 1,400. By 1994, four or five more colleges had come up, partly due to the IT boom triggered by Y2K, or the Year 2000 bug in computing systems worldwide that needed to be fixed before December 1999. More than civil or electrical engineering, the new colleges in Odisha offered computer courses like MCA and BCA.

Some of these colleges, said the former principal, were run out of homes. “When those became too obvious a fraud, the government came out with norms pegging minimum landholding for a campus,” he said. “This is where the mining and real estate guys came in.”

By 2011, the state had close to a hundred colleges. Of these, said the principal, about 60 came up in and around Bhubaneswar alone.

Old players expanded as well. Colleges set up with a batch size of 300 upped that to 900.

With such a rapid expansion in colleges, finding faculty became a problem. The teacher to student ratio went up and colleges began hiring less qualified teachers.

Most of the education provided at this time, said the principal, was not very good. He left one college in the mid-2000s after a faculty recruitment meeting where lecturers were offered Rs 2,000 as salary. “They would not pay salaries on time,” he said. “They would pay for a month and then delay the rest. Most of their money went into acquiring of land and erecting buildings.”

None of this, he said, was challenged by the regulators. Both the Biju Patnaik University of Technology, which accredits engineering colleges at the state level, and the All India Council of Technical Education, which accredits them at the national level, turned a blind eye.

Then came the slowdown

By 2010, the state economy was slowing.

Several factors were at work. Odisha’s economic boom was built around exporting raw ore. As a previous story in this series noted, there was little attempt to boost local manufacturing and export steel instead. Worsening matters, those gaining from the export boom did not invest in businesses which could have created jobs. Instead, they put their money into financial investments like gold, houses and land.

The slowdown has affected gold chains, which are now offering discounts to customers.

By 2011, said the principal, students were struggling to find jobs.

As things progressively worsened, engineering graduates in Odisha have been pushed into sitting for banking entrances. Students heading into graduate studies are opting for general degrees intending to later try for jobs with banks or the Indian Railways. At least some students have given up on education itself – opting for more immediate jobs like real-estate brokerage or driving autos. Moving around in Bhubaneswar, one refrain came up several times: “What is the use of spending Rs 4 lakhs and four years to get a job which earns you Rs 8,000 a month? I am better off buying a tempo.”

And so, the number of students applying for engineering has fallen every year. With seats going empty even at relatively established colleges, the KITE professor, in his early 30s, is thinking of leaving for Delhi, to find an IT job there.

In this ocean of overcapacity, colleges that came up after 2008 are the worst affected. Said the former principal: “There are 15-20 of these. They came in too late to build a name for themselves.”

The KITE professor agreed. If 12,000 students apply for engineering, he said, 4,000 will go to the government colleges. Of the rest, about 3,000 will go to more established private colleges – like Orissa Engineering and Silicon. Which leaves the remaining colleges – 88 or so – with 5,000 students between them.

Fixing the problem – by making it worse

The colleges’ response has been vigorous. It has ranged from cost cutting – firing teachers and replacing them with lower-cost ones – to aggressive marketing and lobbying to attract as many students as possible.

“The auto-flow is zero,” said the KITE professor. By auto-flow, he meant students coming to the college on their own. “Marketing kar ke hi hota hain. You get students only through marketing.” Colleges have engaged brokers. Faculty is being asked to enrol students. And some colleges, said the former principal, are targeting students from the Scheduled Castes and Tribes – they get an annual aid of Rs 62,000 from the government.

Since the slowdown started, colleges have also been pushing for measures that will broaden the pool of eligible students. They have succeeded in getting the eligibility percentage for appearing in the entrance exams dropped. They have also successfully pushed for a resumption of Odisha’s own Joint Entrance Exam, which is less rigorous than the all India Joint Entrance Exam for engineering colleges. And they are asking for permission to admit more students from other states.

All this is happening despite pre-existing concerns over the quality of education being provided by these colleges.

These measures, said the principal, are weakening the quality of education further. “This is not quality. It is kwality. Paisa do ice cream lo” – give money, get ice cream.

Scroll contacted Binod Dash, the head of the Odisha Private Engineering College Association. He did not respond to emails, phone calls and messages. Similarly, Shashi Shekhar Mohanty, the founder of KITE, did not respond to phone calls and messages.

Larger implications

Looking at Odisha, it seems the odds favour the colleges, not the students or their teachers.

A part of the reason goes back to the ownership of these colleges. Said the principal, “No action is taken as a lot of MLAs own these colleges.” Take the college at Bhadrak where employees went on strike. It has since been taken over by the government. It is linked to MLA Prafulla Samal. His son is the chairman.

In Odisha, a very narrow wedge of the elite controls most economic life in the state – the same names crop up in education, media, mining and politics. Take Patnaik. Apart from being the editor of a newspaper, he is the chairman of KMBB College of Engineering & Technology.

This situation yields unequal outcomes. The miners, businessmen and politicians who set up colleges have their bottomlines protected. Even if the college collapses, the real estate it squats on will continue to appreciate. The building itself can be repurposed. As the former principal said, “KITE? It will be a hotel someday. Or a godown.”

The worst affected in this are the students.

Take Yogesh Mahanta. This slender 22-year-old finished his BTech from Sambalpur’s Silicon Institute of Technology earlier this year. Despite being one of the better-known colleges in Odisha, it attracted no more than five or six companies for campus recruitment. Of the 53 students who studied mechanical engineering – like Mahanta – just 16 got hired. The rest, he said, have left for Delhi and Mumbai to look for jobs. Most starting salaries are between Rs 8,000-Rs 10,000. He paid Rs 600,000 for the four-year course.

Mahanta got a single offer: A college wanted him to join as a lecturer for other BTech students on a monthly salary of Rs 8,000. He was keen to join, he said, but his father told him not to. “Who knows how long the college will last?” he asked. He is now studying for a certificate in Computer Aided Design.

Corrections and clarifications:

The location of the Silicon Institute of Technology was misstated in an earlier version of this story.