It’s placement season at the Indian Institutes of Management, and there is more than just a tinge of envy and a vicarious thrill of achievement in tracking the bidding by employers. At Ahmedabad, the highest offers have jumped up by as much as 33 per cent, and one graduate could well begin his work life with a salary of 185,000. But, untypically, that is not the big story this year. It is, instead, about ten students at IIM-A who decided not to apply for the final placement programme in their resolve to strike the entrepreneurial path straight out of the campus. They are not seen to be opting out, but to be grasping the future. The centre of gravity in the Forbes list of the world’s wealthiest is tilting, more and more every year, towards those who left graduate school with a new idea.

The lesson from the IIM placements, however, accrues from a careful reading of the emotions they elicit. The young men and women are seen to be akin to winners of lotteries, the few hundred bright ones who cleared the entrance tests over the thousands of other — equally bright — candidates. It is therefore that placement season does not so much highlight an achievement of higher education in India, but its failures. Rahguram Rajan, IIT alumnus who is chief economist at the IMF, sensed it in an absurd spectacle. He chanced upon a teacher who coached students for entrance examinations not to top colleges, but to elite coaching classes that would in turn put them through the grind for the big test. This absurdity links directly to a great danger for India. Having announced itself as a key centre for skill-based industry, its pathetic capacity for engineering and management training could restrain the country from meeting its potential. So, he says, India needs 50 IITs, not seven.

This country glimpsed its possibilities 15 years ago by dismantling the licence raj in industry. It can realise them by reforming higher education, by allowing the private sector in and by encouraging the IITs and IIMs — and the MITs and Whartons — to set up new campuses in the country. By setting them free, not subsidising them.