What Explains the Massive Popularity of Coaching Centres for IIT, GRE and GMAT in India?

Everywhere you go in an Indian city, you will be hit by boards and signposts of private coaching centres, offering tuitions for entrance exams such as IIT, IIM-CAT, GRE, Law school, UPSC and GMAT.

The private coaching centre industry is so big that it could very easily compete with regular, accredited colleges in terms of size. Let’s consider how quickly private coaching institutes have been growing.

According to a report by ASSOCHAM, a leading industry body, in 2001, the entire private tuitions industry was worth $2 billion.  Then by 2013, the coaching centre industry was estimated to be worth $23 billion. 2015, it was worth $40 billion. Now that we are in the flag end of 2017, we expect the figures to be much higher.

 Another report by Asia Development Bank indicates that the private coaching industry in India will grow by an estimated 15% every year. According to the ADB as many as 83% of high school students attend some coaching institute in the country.

Have you wondered why private coaching centres are so popular in India? There is no question that the demand for these institutions is simply extraordinary. Almost all students join a private coaching institute. Any student who does not attend a private training institute is an outlier, and he or she is seen as being non-serious about their career prospects.

There is a certain societal pressure on students in India to join private coaching institutes. Indeed, students are more serious about these institutes than the high school or college they go to. Many students go to a college or high school, mainly for the purpose of registering attendance, not for learning something new. All the learning is done in private coaching institutes.

Indeed, there are many teachers and lecturers who work in these institutes apart from their work in a regular school or college. While a teacher in a high school earns a salary of Rs. 30,000/month, the same teacher gets paid Rs. 1 lakh/month or more, for taking private tuitions for about 2-3 hours every evening.

This is a not a good commentary on the Indian education system, but there is no question that the private coaching industry has a very attractive business model.

Large international companies, such as the South Korean private education major, Etoos, have been setting up coaching centres in India worth millions of dollars. Some of the Indian coaching centres such as Byju, run by a young teacher, are now worth over $100 million.

IIT coaching remains the most popular and is estimated to be worth Rs. 180,000 crore – which makes it more valuable than all of the IITs put together!

 However, just because a student attends a private coaching institute is no guarantee that they are going to make it to the IITs or clear GRE or GMAT with flying colours. Only 5% of those who attend these coaching classes go on to attend top colleges.

So ultimately, how well a student does in entrance exams is really about them and how good they are, rather than about the coaching classes. But there is no question that if you are weak in a particular subject, going to an extra coaching class will certainly help.