A Critical look at Business Model of Coaching Industry in India

Broad look at the Business Model of Coaching Industry

Well, the topic says it all! I don’t know how many people will appreciate me writing this and I do not know whether this forum would be okay with someone addressing this issue.

Okay, cutting to the chase, the coaching industry evolved solely due to schools and colleges being unable to provide quality education to the students. It is merely due to this reason that you can see such long queues outside any coaching institute once HSC or SSC results are out! For those of you residing in Mumbai, you would probably be familiar with the coaching institutes hiring volunteers who would stand outside any railway station, distributing pamphlets/flyers specifying details of the courses they offer and the faculty from whom you could be coached.

Now, what does a coaching institute have to do under ideal circumstances?

It can be summarized:

√ Enhance knowledge of students by supporting them at each step of learning

√ Be a bridge to students’ learning and development

√ Encourage students who are weak to not lose hope and give them the right direction and attention

√ Handhold students who aren’t able to grasp concepts easily/ slow learners, give them a sense of feeling that ‘we are with you’

Beyond the aforesaid, I do not feel any coaching institute’s role exists. The very fact that so many coaching institutes are sprouting in our country should be a matter of question, why do so many people need to go for it? Is it our schools and colleges that do not have any qualified teachers/professors or is it something else? Why do we find so many people resorting to coaching institutes for study?

Let’s dive into this to find out. Primary reasons could be:

• Increased burden on schools and colleges

We all know most of the schools and colleges run on government aid and due to which results in fees being subsidized. As a result, we have a lot of students in a single classroom. This in turn leads to an appalling student-teacher ratio. All in all, it leads to an increased burden on teachers and they do not feel the essence to impart knowledge which in turn leads to students attending school/college merely for attendance and leisure among friends.

• Teachers/professors adopting a lethargic approach

Well, that’s a known fact to all! We all have during our lectures in school/college days played a lot of fun and poked it towards our teachers. That is solely causes of their super lethargic approach being followed, rather we can say they were just indifferent towards students. Ultimately, they all know very well each student would have his syllabus covered through some coaching institute, so he/she wouldn’t be interested in teaching as such. In a nutshell, they are doing a job simply for a paycheck.

• The increased pressure of performance in exams

With rising population levels and limited seats being there for prestigious courses we have many competitive exams in the form of ‘entrance exams’. As a result of these various competitive entrance exams are conducted to reduce the number of people in a particular field. This results in intense performance pressure.

By and large, I have tried to summarize the core reasons for which we turn to coach institutes for may be guiding us? Or in a better way to ‘train us’ Okay! Everything is fine as long as they can satisfy a teacher’s requirements and accordingly provide students with mentorship.

But the real issue starts when this ‘teaching’ remains unrestricted to ‘teaching’ and encroaches on the territory of business and hence, the title “business model”. Well again, nothing wrong with running a business and charging hefty fees for teaching only 1 subject!

There is nothing wrong with running an ethical business rather the issue to be considered is the ‘unethical’ element of getting involved. The context which I am addressing is about the CA course as I have experience in this course only.

Elaborating on the ‘unethical’ aspects involved. These are some of the aspects discussed/ addressed whilst attending coaching classes.

• Creation of a false image of the outside world about CAs

Yes! I have previously mentioned this. To give you an example from a popular coaching institute in Mumbai where I went, a professor claimed “CA earns an 8-figure salary in 4-5 years. When you will go for statutory audits, the company will sponsor you for tours and you would get the finest delicacies served as well as a business class seat on flights!” Well well! Those who have had experience in statutory audits know the cold-harsh reality we have to deal with. An experience from my friend’s statutory audit, they had signed the audit report by merely copying the previous year’s format without even being aware of CARO reporting requirements. Later on, when the client pointed out, they merely signed the new report as submitted without much verification.

• False feeling of self-inflation

I remember a professor during IPCC coaching say “When auditors enter client premises the clients would tremble at the sight of the auditor” Now an example from my articleship experience, one of our clients, the CFO had bluntly told my partner “If you won’t sign the report, I can get another person to do it for a cheaper price. Sign if you want to or else leave the audit” Well pretty much trembling!

• Intense marketing campaigns in the form of ‘orientation day’ on the first day of classes and other days as well

I vividly remember how on our first day after HSC exams I had joined for CA-CPT class and the professor says “You must either get rank or pass in 1st attempt, or else you are a useless CA” Now what does this mean? Is this reality or just marketing so that people get hooked and start developing some crazy shit level of enthusiasm that is entirely coming from outside and not his own? This enthusiasm experienced isn’t even owned!

Another example as stated by my friend recently, one class claimed “If you study from our book you will pass definitely! Or else we will refund your money!” Well, these ‘guarantee’ campaigns run only in India, they have applied it!

• Constant pressurizing to perform in exams 

Another incident as I remember, was when some AIR-1 had come from their institute, and the entire area was flooded with posters and hoardings with the photo and on top the class’s name with bold letters. The founder of the classes kept stating “I want to see many more hoardings like this. It should be your dream to have your photo on our hoarding”

This rather gets transitioned from celebrating the success of the individual to bombarding “OUR STUDENT SCORED CAUSE OF OUR TEACHING” If you are smart enough and are open-minded to know the motive behind all this, you can easily decode it that this is pure marketing! It’s nothing else! An organization wants their brand pertinent in the market and occupy their fair share!

To summarize their business model:

Well, I have covered the aspect of how emotionally we remain pulled in this course in my previous article. If you haven’t checked it, do check it! I know this may generate a wide range of comments and views from the masses.

Furthermore, I have nothing in personality against anyone, it’s only the simple fact that falsifying and manipulating students who are a novice and have no idea of the practical world is wrong! It needs to be called out and addressed to make people aware! I am saying this being a victim myself and later on realizing the harsh reality we live in and how these businesses are running with what motives. I was hooked and kept facing pitfalls in my Finals, finally after a great amount of courage and determination and some introspection, I developed the “ABILITY TO LET GO”. And yes! It turned fine and I am at the deserved job today! Do as your heart says! And have the ability to distinguish is this my madness or is it worth what I am doing?  It need not fit into my model precisely.

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Let me know your comments! Feel free to reach out to me in case anyone wishes to know how I dealt with this transition if you would want to – [email protected]