There is a gaping hole in Indian higher education. I’m probably speaking from the perspective of engineering/science education but I’m sure the situation in other fields is the same.
In engineering, we have the IITs at the top. Some NIT’s and BITS are probably at par. They offer quality education and training. But they are few and the student intake is barely a few thousand combined.
The next best institutes are state level colleges and universities and barring a few possible exceptions, are largely pathetic. The education they provide is worse than no education.
This is the gaping hole. In the US, there is continuous gradation in the quality of universities from top to the bottom. There is not quantum leap between the best universities and the next best ones. Given this system, the chances of a student landing at an institution best suited to his abilities or means are high. In India, you either get very good education (at an IIT) or you get a pathetic one. If you aren’t lucky enough to make it into the top tier, you’re left with nothing.
We need to saturate out this gap in the Indian higher education – bring up the level of state level colleges and universities. This might be even more important that setting up new IITs or IIMs. When the competition around them rises, IITs and IIMs will automatically be forced to up their game to remain on top. Right now they have no competition. They are probably stagnating or worse, deteriorating.