"Each year only 10 per cent graduates actually get suitable jobs (like executive level) as MBA courses are not adequately designed to match the industry's demands, besides lack of quality faculty at most of the institutions," Assocham said in a study.
Barring graduates from well-known B-schools including IIMs, the B-schools are not able to attract companies for campus recruitments, it added.
In the last four years till 2012, the campus recruitments have gone down by 40 per cent as a result the B-schools have not been able to attract large number of students, Assocham said.
The study claimed that more than 180 business schools have closed down in 2012 in major cities like NCR, Mumbai, Bangalore and Kolkata. Another 160 institutes are struggling for their survival.
It said, in the last five years, the number of B-schools in India has tripled to about 4,500 amounting to as many as 3.6 lakh MBA seats (yearly), collectively.
"There is no quality control in most of these institutes.
The placements are not commensurate with fees being charged and the faculty is not up to the mark," Assocham Secretary General D S Rawat said.
The biggest reason for the gap is the rapid mushrooming of tier-2 and tier-3 management education institutes that has unfortunately not been matched by commensurate uplift in the quality of management education, he added.
"The need to update and re-train faculty in emerging global business perspectives is practically absent in many B-schools, often making the course content redundant," the study said.
The surveyed students said the business schools promote their brands only on placement and by boasting about high salaries. They offer theoretical courses which lacks practical skills required by the corporate sector, it said.
Further, Rawat said, the quality of higher education in India across disciplines is poor and does not meet the needs of the corporate world.
The mushrooming management institutions had created void in the fields of science,technology,engineering and even medicine as the candidates were lured of placements offered for such of those who qualified in the management courses.The concept of good management arises only when there are enough to produce, manufacture,research etc.,In the process of producing managers, we did not produce the good nos. of scientists,engineers as a consequence, top heavy management personnel came out and now it is reflecting in the closing of much pampered management institutions. Also,since management education also has many specialities and results in improper palcements etc.,thus creating mismatch in job satisfaction etc.,