A futile pursuit? India’s overworked & underpaid engineers make engineering education seem thankless

This disparity in quality often leads to a skewed representation of Indian STEM graduates in international rankings.

By Siddharth Pai

STEM (Science, Technology, Engineering, and Mathematics) education plays a crucial role in shaping the future of any nation as it directly impacts global competitiveness. India has a long history of producing highly skilled STEM professionals. The country boasts prestigious institutions like the Indian Institutes of Technology (IITs) and the National Institutes of Technology (NITs), that are globally recognised for their rigorous academic programs. Unfortunately many of these graduates leave the nation for better prospects. One-third of those graduating from the country’s prestigious engineering schools, particularly the IITs, go abroad.? (bit.ly/45RMTH6)?

However, these are relatively small in number. Our country’s “demographic dividend” with such a large proportion of our population being comprised of school and college-going ages has seen a proliferation of private market education providers spring up, and has also seen older institutions expand to bursting point. One guaranteed way to make money in today’s India is to open up a well-marketed engineering college, regardless of quality. It is an understatement to say that the quality of STEM education in India is not uniform across all institutions. While top-tier institutions maintain high standards, others struggle with issues like outdated curricula, inadequate infrastructure, a shortage of qualified faculty, and greedy owners. This disparity in quality often leads to a skewed representation of Indian STEM?graduates?in international rankings.

In 2020, India produced over 1.5 million engineering graduates, making it one of the largest engineering?education?systems globally. Unfortunately, a 2019 study by NASSCOM found that only 2.5 lakh of them get jobs in engineering. (bit.ly/3EyDYhz). Clearly, the quantity of engineers we output in India does not equate to quality.?

In contrast, various articles in the popular media, and reports to US?Congress?have stated that the US has roughly 70,000 undergraduate engineers graduate annually. (bit.ly/3PxFUwX). In the early 2000s, entry-level salaries for engineers ranged from $50,000-70,000 annually, depending on the engineering field and geographic location. Over the next two decades, these salaries steadily increased, primarily due to high demand for technology professionals and the innovation-driven economy. By the early 2020s, fresh engineering graduates in the US could command starting salaries ranging from $70,000-100,000 or even more in technology hubs like Silicon Valley.

The growth in salaries for Indian engineers has not kept pace with the growth in salaries in the US. This is nowhere more evident than in the starting salaries being offered by our IT majors to fresh engineering graduates. While there are stray instances of these freshers being offered `10 lakh and above as starting salaries, the reality is that the majority get nowhere close. The truth is that their salaries have remained more or less constant for almost two decades, with insufficient correction for inflation. In reality, this means that engineers graduating today are only making a fraction of what their seniors did twenty years ago.?

In my experience, in the early 2000s, fresh graduate engineers in India could expect modest starting salaries in the range of `2-3 lakhs per annum (or circa $4,500-6,500 at then-prevailing exchange rates). Apart from the exceptions I have spoken of above, it appears as if the hiring of fresh engineering talent at the same low salaries as two decades ago is an exploitative tactic that is still used by the country’s IT majors.?

Witness?Wipro’s move earlier this year. On February 21, 2023, India Today reported that the company walked back its commitment—by almost 50%—on the salaries it was willing to pay fresh engineering graduates (bit.ly/3PbKnEg). The article read as follows “In an email, the company asked the freshers to settle for almost 50 percent less salary than what Wipro was offering initially. Salaries were slashed to 3.5 lakh from the earlier 6.5 lakh. While the tech firm has blamed bad macro environment for changes in its decision, it has also asserted that freshers are at least getting an opportunity to build their expertise and learn better.” At today’s exchange rate, this translates to ~$4300 per annum, no different (actually lower, when inflation is taken into account) than 20 years ago.

“At least getting an opportunity”? I have no way of knowing whether this was the exact statement, but if I were to go with what India Today says; this statement, if actually made by someone at the company, reeks of arrogance and a tone-deaf attitude toward new joiners.

According to industry doyen TV Mohandas Pai, now of Aarin Capital Partners, who was interviewed by TV channel CNN News 18 when news broke on this topic, this is “very wrong”. (bit.ly/3PfMYNq). He went on to say during the interview that “companies need to be seen as credible employers….yes, there is economic difficulty….but you can’t say join with half your salary…since these students would have turned down other offers to go for the brand name….when you are making profits of 9,000-10,000 crore per year, incurring an additional cost on 1,000 or 2,000 employees of 100-200 crore a year is not going to hurt you….It should not be done”.? When asked? about whether these employees could make money by moonlighting, he pointed out that “these are freshers who might not have the skills to moonlight….we are going to see high attrition since they have broken the bond at the beginning of the relationship. It is not an issue of moonlighting as much as it as an issue of corporate values”. He advised the freshers to “take up the job with Wipro for now, get trained, look around for a new job and leave as early as possible.”

I can’t help but agree with Mohan, who is an old friend. We have firms ever ready to exploit our demographic dividend. I would strongly suggest to parents that they steer their kids away from an engineering education. Our engineers are underemployed and exploited.

Siddharth Pai is co-founder of Siana Capital Management, a venture capital fund management firm. The views expressed are his own and don't reflect any other entity's.

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