65% of MBAs want a job in Government company – Survey

More than 65 per cent of business school graduates preferred to work government companies compared to private companies, a survey of over 500 students from various B-schools, including IIMs, BITS, ICFAI Business School and Symbiosis Institute of International Business (Pune) found.

The ASSOCHAM survey conducted between June and July 2014; found that, the graduates are flocking to topline public sector companies due to job security, improving prospects of firms and headwinds faced by the private sector, especially those in the highly leveraged sectors like telecom, real estate, power and other infrastructure.

The number of intakes by the PSUs from the B-Schools, more so those outside the IIMs, has gone up by 160% this season over last year, said Mr. D. S Rawat, Secretary General ASSOCHAM while releasing its paper on “PSUs back in reckoning”.


The paper further highlights, “there is a big increase in the demand for jobs in public sector undertaking (PSUs) this year. The number of job applicants for such jobs has increased by over 160% this year. Also, there is a steep rise in the management trainee jobs in public sector in the last one year (120%).

The survey finding is considered very surprising as government company jobs pay 30-50% of what private companies pay. It was assumed that, with increasing education and exposure, Indians would want to consider entrepreneurship as a viable career option.

However, going by the survey, MBAs don’t want to start their own company, or even work in a private company where rewards, promotions and salary tend to be proportionate to merit and hardwork. Instead, they want to work in government sector companies that have fixed increments and where employees cannot be fired easily even if they are unproductive.

As per the current findings, SAIL received nearly 2.2 lakhs job applicants this year from various B-schools which is much higher the last year (1.2 Lakhs). Similarly, ONGC also received 1.5 lakhs job applicants this year, increasing by 120% than the last year. NTPC (1.2 lakhs), Indian Oil Corporation (IOC) received 98,000 job applicants followed by Gas Authority of India Limited (91,000), Hindustan Petroleum Corporation Limited (88,000), Bharat Petroleum Corporation Limited (75,000) etc. received the maximum job applicants this year, higher than last year, reveals the ASSOCHAM paper.

Over 65 per cent students said their first choice would be to join PSUs and Central government jobs. The top picks for them include ONGC, IOC, NTPC, HPCL, BPCL, SAIL and leading PSU banks like the State Bank of India (SBI), adds the ASSOCHAM paper.

With the improved Sixth Pay Commission salaries and announcement of the next Pay Commission, due to give its report in 2016, even the government jobs are attractive and more lucrative.

The PSU companies are offering nearly Rs 10-12 lakh annual package, higher than the average starting salary of Rs 7-8 lakh in the private sector offers for fresh engineering graduates and pass outs from the second their B schools. Most public sector units offer starting salaries between Rs 9-11 lakh, adds the paper.

Apart from salaries, a number of special allowances are paid to the officers which include children education allowance, professional pursuit allowance, bungalow maintenance allowance, courtesy allowance, hard duty allowance, canteen subsidy, remote area allowance, North-east allowance, cable allowance which are over and above normal allowances like house rent allowance and dearness allowance in public sector units.

Allowances at very liberal rates are also given in the form of transport subsidy, hostel subsidy, mobile bill reimbursement, newspaper reimbursement, concessional procurement of equipment like laptops, furniture etc, adds the ASSOCHAM assessment.

“Campus hiring by state owned companies has increased disproportionately”, said Mr. Rawat while releasing the ASSOCHAM paper.

Most passing out this year have opted for PSUs since these are among the best options in the present scenario. There is a marked change from the trend of the past few years, when most students lapped up offers from private investment banks, FMCGs, private sector units or consultancy firms, adds the paper.

Indian students opting for public sector jobs over the private sector because of more attractive financial packages, banking and public sector undertaking are a major attraction on campuses today, adds the paper.