Nootan Sharma

Large coaching companies (eg fiitjee), being in this business for over three decades, prob have a lot of reserves prob upto 5 x present revenues – many with holding companies in foreign countries like US. So, it’s not possible that they can fold up so quickly. Newer Kota institutes probably have local assets only.
Any coaching institute (like fiitjee), in order to survive in the current teaching scenario – with a high teacher: student ratio, higher outgo, will need to charge a higher fee, and go into the premium segments of iitjee, sat (foreign admissions), nri seats in indian colleges, and neet. It would have expanded to foreign shores simultaneously with govt policy changes, clearly maintaining strategic contacts within the govt bureaucracy so as to get early mover’s advantage from anticipated policy changes.
For local students, fees are itemised, so that the fee refunds (if reqd) are given for tuition, but not for exams and other management items.
Another very old tactic that’s adopted by most managements is to keep almost 30% of salary as employee benefits, and also have stringent bond conditions on leaving/resignations… to get the “maximum performance”. After a few years, the salaries increase and employee benefits swell & become a large part of the company’s expenditure – making the company unviable: and therefore, it is a good strategic move by managers to let most employees go in an “irregular” manner – do this every five years or so, and this gets hold of all the cash that has been held in the name of the employee – as they naturally “forfeit” it. The company’s balance sheet, naturally improves substantially. The older expensive faculty/employees are got rid of, and younger cheaper employees can be hired.
There are allegations of cheating everywhere, and even police cases – but so long as the syllabus is completed for the present term – the students can’t really complain much – some may take refunds.
When the results of the exams emerge, there is obviously competition among the people to take credit – this is where the company with more money wins: it can get more video advts from the students by giving large cash prizes, it can put out large advts in newspapers, it has contacts with established school principals, teachers where it gets recruits new students, it has a comprehensive brand name marketing strategy. So, the company actually wins by firing the faculty after every 5 or 10 years.
Some of the teachers who leave don’t do very badly either: so, it’s win-win for both sides, even though publicly they trade a lot of insults. That’s why this happens.