Archive for August 11th, 2008

Economics PhDs In India becoming a scarce commodity

August 11, 2008

I have raised numerous concerns over declining research standards in India ( See  Indian academia salaries- Too low or too high?, A request to India’s Ivy Leagues- show us some research, Deciphering the B-school ranking in India etc) .

This recent Business Standard article further confirms my views and extends the scope of discussion from B-Schools to Economics departments/ Schools.

D K Srivastava, director of Madras School of Economics (MSE), is disappointed when he sees 50 Master’s students graduate every year with lucrative job offers. MSE admits two or three students every year for its doctoral programme, a third of what it can accommodate. Aggregate data on the number of students completing their PhD in Economics are not available.

Even the Indira Gandhi Institute of Development Research (IGIDR), a premier institute set up by the Reserve Bank of India (RBI) for research in development issues, found it difficult to attract students for its PhD programme a couple of years ago.

What are the reasons?

Three issues — faculty profile, poor scholarship funding and job opportunities — are being cited as reasons Indian universities have failed to attract good quality students, said four economists, including three heads of the institutions, who were contacted for this article.

Apart from scholarships, the faculty profile and the syllabus play an important role in attracting students. “What I learnt ten years ago is not even offered here in India,” said Parth J Shah, economist and former professor of Economics at the University of Michigan.

The opportunity cost of doing a PhD is huge:

Students graduating from Master’s programme in MSE and IGIDR get job offers in the salary range of Rs 6 lakh and Rs 8 lakh a year — mostly from banks, financial institutions and consultancies. Candidates even after completing the PhD would get only Rs 50,000 more than what a Master’s level students would get, said IGIDR’s Nachane.

“The opportunity cost for a student with Masters Degree to pursue a PhD in economics is very high,” he added referring to Rs 6 lakh salary the PhD student would have earned for four years, if employed.

So, is it that people are not interested in doing PhDs? Not really. Most head west.

For the few students who want to pursue a PhD, foreign universities have emerged as a viable option. These overseas institutions are targeting Indian students and are offering liberal scholarships that are hard for Indian counterparts to match, said D M Nachane, director of IGIDR.

Overall pretty worrisome times. With so many IITs and IIMs coming up, one keeps wondering where the faculty will come from. But obviously they are interested only in big P- placements. As long as they are good, rest can be ignored.

I was talking to a friend who tracks these colleges and was asking him about the fellowship programmes at the IIMs. He said the same there is no point as industry does not value it. He said exactly the same after five yeasr you get the same salary as you get in a Master’s program. But the same industry values the MBA/Masters in economics programs highly. I keep wondering how can doctoral programs be inferior than master’s program. What is going on?  

A big problem in education that has surfaced in India is brands. What matters is not what you know but from which school/college you are. The post graduate programs are considered a brand from some school but not doctoral programs. For doctoral programs the fancy thing is to get it from a US based University. Even the Indian Universities value the foreign degrees more and it is easy to see most faculty has done its PhD abroad. So, a PhD from India suffers on both counts. Neither the corporate guy takes him/her, nor is he/she preferred in the academia. So, people either join industry after masters or go abroad for PhD. I really don’t know how can we get out of this rut.


I was just thinking how can Indian econ departments/B-Schools get out of this “no research/hardly any research” problem. Let me take a cue from one of the most taught management strategy models – BCG Matrix

I think they need to acknowledge that  they have ignored PhD/research for a while and instead concentrated on Master’s programs. These programs were Stars (Shooting Stars is more appropriate)  and had high growth rates and high market shares. These stars have become the cashcows and have got these schools some revenue and recognition.

Now, is the time to focus on research which is a dog/question mark and move it to a star category. It is research that makes the quality of teaching superior and will ensure that cash cow (master’s programs) continues to remain one. If you do not have good teachers the cow will soon die an abrupt death.

Another point is the application forms. I have looked at quite a few forms and find the entire process pretty cumbersome. I don’t understand the case for the same. With such dismal enrollment these standards can be simplified. Prospective students should be asked to fill a simple form and interviewed. Once this is clear, the other formalities can be submitted (attested mark-sheets, referral letters etc.)

Most of these forms also have a Statement of Purpose (SoP) which is simply a concept borrowed from the US universities. The US universities have SoP  as they get applications from all over the globe, so they need to sort out applicants. This is not the case here and reason etc for doing PhD discussed can be discussed in the interview itself. Anyways SoP writing does not achive the purpose as I am sure most is cliched stuff and with plenty of advice on the web, most SoPs would be very similar. To seperate serious from non-serious applicants, an interview would be needed anyway.

Rodrik on development

August 11, 2008

I came across this superb interview of Dani Rodrik. It very neatly covers his research and summarises his views on development.

Check his take on Washington Consensus:

When the original Washington Consensus was first enumerated by John Williamson, almost all of the items on the list were relatively simple policy measures; they didn’t have a very strong institutional background. Things like price liberalization, opening up to trade, having a realistic real exchange rate, eliminating financial repression, none of these really required institutional investments. They really did not recognize that what was really important was the institutional underpinnings.

However, number ten on the agenda, was “Secure Property Rights”. And the history of this is interesting because, actually, that was an after-thought for John Williamson. When he had first listed all the things he had then on the agenda, he came up with nine. Of course, that was not a round number, so he said: “I better come up with a tenth item!” and the tenth item, number ten in the list, was Secure Property Rights! Secure Property Rights is a clear institutional recommendation; that’s the foundation, many people would say, of long-term prosperity.


First individual Gold medal for India

August 11, 2008

I have been waiting for the moment all my life.

Abhinav Bindra wins the first ever individual Gold medal for India in Beijing Olympics 2008. He achieved the feat in 10 m Air rifle beating China and Finland shooters.

As a kid I always flipped newspapers to see the medal tally of India and was always disppointed. Somehow we managed one medal in every Olympic to keep us away from the Nil scoreboard. The prayers were to see one medal and that was it. Last time a Gold came was in 1980 and that was in hockey.

Things changed a bit when Leander  one Bronze in 1996, Rajyaarhan Rathore won Silver in Athens 2004 and now Bindra wins Gold in 2008.

It was a superb feeling to hear the National Anthem play when Bindra received the medal. Goose pimples all around. Thank you Abhinav Bindra for giving us this moment.

Assorted Links

August 11, 2008

1. WSJ Blog points to Olympic predictions.

2. Mankiw points to comments on impact of fiscal stimulus

3. DB Blog points to the World’s most expensive city – Luanda

4. Has dollar depreciation impacted oil prices. Find out from Hamiton


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