Why States Don't Want New Engineering Colleges Anymore?

This decision has been taken by these states because there is increased number of seats which are going vacant every year across the country and the main reason for this could be the more number of colleges being established in India than the number of students who get admitted.
Karnataka
In Tamil Nadu, the state government had asked the AICTE not to grant permission for any of the new engineering colleges by seeing the record number of 1.5 lakh students admitted to 471 engineering colleges, including 1.12 lakh under government quota in Tamil Nadu Engineering Admissions (TNEA) 2010, which was the highest intake in any State in the country in that year. In Karnataka, in the year 2011, the number of vacant seats for engineering colleges has increased. As per the Karnataka Examination Authority [KEA] had estimated that nearly 13,000 seats would go unfilled through the Common Entrance Test [CET] and the number of unfilled seats through Comedk would be around 9,328. So overall, nearly 22,000 seats would be unfilled for both engineering and dental courses. As per the estimation by the KEA, the selection and counseling process for engineering got over on October second. In that nearly 30 engineering colleges all over the state of Karnataka did not find even a single taker for their seats.