Indians like to market the quality of all citizens by quoting the success of IITians, IIMs and some successful personalities working in top positions at MNCs. But talk to the CEO of any Indian company, large or old, small or young and their number 1 issue will be the quality of their work force. The inability to hire good people at a reasonable price is the root cause for lot of businesses to be stunted or disappear. It is very common that many good managers are over priced to their counterparts not because they are good but are located in India.
Prof Sohan Modak and me have analyzed our education system and evaluation methods used as one of the root reasons for the mediocrity. Winston Churchill had the following to say on school examinations. Very relevant since we inherited the system from the British.
I should have liked to be asked to say what I knew. The examiners always had to ask what I did not know. When I would have willingly displayed my knowledge, they sought to expose my ignorance.
Countries all over the world, particularly developed countries, require highly skilled and trained manpower to sustain their progress during the last century. The greying population globally and declining population in western countries places India in supreme position to provide human intensive services be it IT, medical care, agriculture etc. India has more than 35% of its population below the age of 15. However, this resource remains largely raw and not processed for high-tech skills. Countries looking to tap into this reservoir face many challenges due to variety of schooling systems, teaching infrastructure, variable teacher quality, highly conservative syllabus contents and student performance evaluation system of questionable value. This is further exacerbated by excessive controls by the affiliating or accrediting agencies of the State and Central Governments.
In India, with its middle class population of around 200 million, investment in children’s educationis the highest priority for parents who would rather have them follow career paths in Medicine, Engineering, IT, Accounting, while specifically refraining from professions involving vocational skills like plumbing, wireman, carpentry, medical technician, nursing etc. At present there are two distinct types of educational institutions. The first group is government-funded with affordable fee structure and established educational programs where the admission is based on merit for 50% of the capacity and the rest is reserved for historically deprived sections of Society. In contrast, the second group, a relatively recent outcome of economic liberalization, involves a panoply of private institutions (e.g. so-called Deemed Universities) that charge excessively high fees and handsome donations (capitation fee), irrespective of student’s merit for admission. Both these classes of institutions are under Government control in terms of accreditation/affiliation.
Despite better income, the private institutions are no better than government-aided institutions due to their desire to mollify students having paid exorbitant fees by way of manipulative evaluation practices; with every one passing the final examinations. As the capacity of Government institutions has not kept pace with the increasing size of the aspirant middle class, many parents are forced to pay exorbitant fees, often higher than in developed countries, to see their wards through higher education.
Fast growing employers, particularly in the IT/outsourcing services sector find it challenging to source candidates from this disparate system. Consequently, all companies have their own evaluation process that includes entrance test and face-to-face interviews due to a lack of trust in the existing University evaluation system.
Lets look at Evaluation system in more details. There are two principle issues concerning evaluation of academic performance, one relating the nature of evaluating body/organization and the second concerning the nature of examinations. Most examinations, excepting terminal school and college examination, are conducted within individual institutions. The terminal examinations, e.g. Secondary school certificate (10 years schooling: student age 16), Higher secondary or Junior collage (10+2), liberal arts & science college (10+2+3), Semester/Annual examination in Technical (10+2+4)and Medical (10+2+5_) degree colleges, involve centralized assessment.
Organization of centralized examinations. The examination process requires three distinct steps,  Setting up of common question papers,  conduct of the examination and  assessment of examination papers.
 The questions, mostly subjective, are drawn from a Question Bank and the paper setters are drawn from a panel of registered teachers from High schools, Colleges and Universities.
 The examination is conducted for hundreds of thousands of students at a vast number of geographically distributed locations where the same papers are made available at the time of examination. The logistics for this part of the process have been well rehearsed.
 After the conduct of the examination, all papers are collected at centralized location and a panel of registered examiners assesses the papers. Since the number of students appearing for centralized school examination runs in hundreds of thousands, the number of examiners/assessors is very large and necessarily heterogeneous. Furthermore, there is a compulsion on the examiners to assess large number of papers in a given time window.
We conclude that considering the subjective nature of questions albeit drawn from a question bank of limited size, the size of student body appearing for the examination, huge heterogeneity in the number of persons involved in the assessment process and relatively short period allotted for assessment of each answer paper, the existing evaluation system even for terminal examination does not do justice to the original objectives.
So year after year all students go through this evaluations system which leads nowhere. There is no way to benchmark the excellent, good, average at a national level. Teachers and institutions do not get evaluated because it is always the student who has not studied. Anyway all in all we are left with mediocrity all around leading to noise and inefficiencies at all levels.