This is a case of simple supply and demand.

Here's the cold, hard, uncomfortable truth.

The core companies that get mediocre engineers, want mediocre engineers. They get what they deserve.

Now, you'll tell me, that's just rubbish. Why would companies not want the best engineers? These companies will never say it out loud, they'll never say it directly. They'll always say 'we want the best talent in India blah blah bullshit bullshit'.

What they say is utterly irrelevant.
Look at their actions, not their words.

Let me take the case of BITS Pilani, the college I'm familiar with.

Pilani is a shithole in the middle of nowhere. Yet IT companies come from places as far as Hyderabad and Chennai and Los Angeles and San Francisco to recruit a handful of people every year. They pay solid salaries, stock options and offer other great benefits.

But most core companies can't be bothered to travel a third of the distance from the mineral belt and recruit from the local colleges in their sector.

PSUs still dominate in the core sector. They didn't bother to come over, either, and a lot of them acted high and mighty when they did- demanding high grades from students and rejecting them if they'd been involved in research work (especially research abroad). They want their engineers they recruit to be good at sticking to the norms (high GPA) but don't want them to get creative (original research). They also disliked coming to Pilani in the past because there were very few SC/ST/OBC candidates studying at BITS, and the ones that did study here were just as good as the general population and so escaped into MNC jobs. PSUs are bound by government rules to recruit ~50% candidates from the reserved categories.

At IITs and especially NITs, there's a much bigger schism between the reserved category and the general category, and in the latter the number of great job options can get low at times, so they found it easier to find their reserved recruits at these colleges.

This practice was institutionalised recently. There's a new rule that PSUs can only recruit from government colleges the likes of IITs and NITs and students from private schools like BITS will have to write the GATE to be considered. Talk about making it a pain in the ass. Non-core MNCs are falling over themselves to get their hands on a good grad, but PSUs want them to not take up any of these jobs being dangled in front of them, keep their career in flux, just to take a shot at getting a PSU job. It's not going to happen. Even if the grad wanted to work at a PSU, he's not going to risk unemployment. Once he joins the MNC, it becomes harder for him to leave the company, take a pay cut, and join a PSU. (PSUs have high CTCs, but pretty low in-hand pay)

MNCs are adapting and competing for the students by offering them benefits.
Core companies are also stuck in a time-warp, not realizing how quickly they're falling out of the 'prestigious' bubble and sticking to serve their narrow egotistical interests.
Let's take a look at Tata Motors as a case study. They came to Pilani to recruit a few years ago, paying 5.5 lakhs. Shortlisted only people above 8 CGPA and selected only people above 9 CG.

None of them joined- they headed off to MS, MBA, other top jobs etc.

Now, this requires some common sense on the part of the company, doesn't it? 9 pointers have a lot of options. Instead they should have tried to identify the people who would actually be passionate about the work- the 6/7 pointers with good technical skills who were active in SAE, had done automotive engineering electives and projects, and would be willing to tolerate the salaries to work in the field they loved.

Nope. They just picked the highest GPA people they could find, regardless of fit, then cried like babies when they lost them.

A friend of mine is a Civil engg. After his third year, he went to Silicon Valley, and worked as a fluid dynamics R&D guy for a cutting edge medical instrument being developed there, got his name on a couple of patents, a 75,000 dollar (Rs. 40 lakh) job offer, then came back to India.

He decided not to take up the 75k job offer and work in India instead. He ends up sitting for a low-paying civil engg. company interview. First the interviewer gives him shit about his GPA (He was a 6 pointer) They ask him about his projects- he explains this medical instrument thing. The interviewer gets confused. He asks what his favourite subfield of civil is- guy says Fluid Mechanics. Interviewer says "But we don't work with water resources" and rejects him.

Dow comes to recruit for an R&D role. All the students get excited. Then it says it only wants students with a Masters or more. People get pissed and walk off. In general, the masters courses are considered much simpler and less competitive, than the bachelors courses, and most graduate level courses are topped by undergrads. Despite this, the undergrads, the so called 'cream' undergrads were not eligible to apply to the company. A similar thing happened with Shell- it had a awesome sponsored PhD program in europe followed by employment at Bangalore. No B.E.s allowed. Open for the much less competitive M.E students only.

So this is what happens. Placements are very random. Companies refuse to give out specific details about the jobs they are offering until the very last day. So if the name of the company sounds good, we apply.
The day before the interview we find out that (irrespective of CTC) the company is actually paying shit. We aren't allowed to simply walk out of the placement process or tell the company that we don't want a job offer (that might upset them and get us barred from the placement process), so we continue to take part, but make sure to fuck it up royally to ensure we don't get a job offer.

The companies go back and complain that 'these graduates have really poor technical skills'. Boo hoo.

So here we are, at the conclusion.

The 'core' companies you feel sorry about us not joining, offer us terrible standards of living, low salaries, judge our capability solely by our GPA, don't give us any opportunity to do creative and innovative work, and yet expect us to join them over firms that are better at all these aspects.

That's not how the world works. We are top students, we have options. If these companies want us, they need to make it worth our while.
If they aren't doing so, it means that they prefer to pay less and get less competent recruits.

The fact that they look only at GPA and not passion during recruitment also ensures that the students they do get, have lower credentials, but don't make up for it by having strong creative passion for the field. These companies are trying to find mediocre students who will 'stick to the job' rather than trying to improve themselves to make themselves more attractive to top talent.

IT companies hike salaries every year or every other year to keep pace with inflation. Core companies haven't hiked their salaries since the 2008 recession. We aren't stupid, you know, we know what the time-value of money is and we know our value in the market. We will not allow ourselves to get ripped off in the market just because a company is being stingy.

Companies that trust credentials and ban Bachelors students from applying for stimulating research jobs, even if they are qualified for the job than the M.Tech student, are creating a toxic environment. Now the bachelors student who believed he was the best fit for that high-tech job thinks he needs an MS to avoid such credentialism, so he'll go out and get from one of the best universities in the world, rather than take up a job that's beneath his capacity.

So here ends my elitist rant. I don't want to claim that all BITS students are technical gods- any company that finds us below par is free to reject us.

But all the firms that come and offer a pittance (Less than 6 lakhs), then go away thinking that our graduates 'have no technical skills' need to do some soul searching- to determine whether or not the students thought the company was worth joining at all, and if they don't want to be surprised by the disinterest on the final day- well declare the true salary break-up and job description well in advance.

It's not even as if these companies can't afford to increase pay- A friend of mine interned at a fairly generic civil engg consultancy, he was a low 6 point GPA guy without much technical skill. The consultancy didn't know what other civil engg. firms paid at colleges so were happy paying him the college'a average salary instead of the civil engg average, whereas the 'larger', 'reputable' and 'profitable' firms that come for placements try to get away with recruiting the students at the top of the class by paying little more than half that amount.

In the last year the Electronics industry has tried to match IT and as a result, lots of EEs are heading into core, and even a good number of CS guys.

The well paying core companies still have no shortage of recruits (ITC, Schlum, Shell, PnG etc) because they're known for taking good care of their employees.

The rest of the industry is just deluding itself into thinking that they deserve the 'best' without having to pay for it.

Let me be honest, none of us 'wasted' an engineering degree. That's a 10th grader's level of thinking. We all 'used' it for our own ends.

I don't heard anyone complaining when an economics major doesn't become an economist or a philosophy major doesn't become a philosopher, so why is there so much vitriol against engineers leaving engineering?

We came in knowing nothing, learnt a lot in 4 years, and decided to chart a new path for ourselves, and no-one else has any right to tell us what to do with our lives.

You want top engineers to go into pathetic core jobs?

Then go write the entrance exams, get into a top college, get your ass kicked by the degree for 4 years, and then take up one of the said jobs. Practice what you preach.

It's easy to sit on a couch and spew forth bullshit about how the top students of the country need to 'show leadership in their own industry' and shift the blame of India's pathetic core engineering sector onto fresh graduates who had nothing to do with it.

I honestly wish that Sramana Mitra (MIT Degree, Entrepreneur, Strategy Consultant from Silicon Valley), a.k.a Someone who is earning at least USD $200k, and has spent her years working in the most business-friendly place in the world, would write an 'open letter' to the leaders of India's industry, tell the people who are actually in charge to innovate more and build research labs, and tell their HR departments to hire students based on their practical knowledge and ability rather than on-paper stats.

It would be more effective than to moralize to fresh grads (who are easy targets and cannot defend themselves), who have no power to affect change, are struggling to find employment in professions that pay them the purchasing power equivalents of 30k USD despite graduating from the top colleges of their nation.

They are at the bottom of the corporate pyramid, struggling to pursue their ambitions in the best way available to them.

Maybe that ambition is to make enough money to live a comfortable life, or to want access to the same business friendly environment Ms. Mitra enjoys, where the chances of success for their business ideas are much much higher.