I am pondering on this question for last 2 months. I will really like to hear from more people.
I work with Smart India Hackathon and was mentor to teams in Smart India Hackathon and Singapore India Hackathon. Here I work students who are enthusiastic and ready to learn. They are ready to experiment, they are confident, they are not afraid to fail initially to succeed later. Its a joy to work with them.
Obviously they are high in demand in job market and command premium for salaries. Recently I was recruiting for my startup and salaries of many of these students do not fit in our budget. Also lot of our work do not require high end talent. We are looking for students good in attitude and programming aptitude but may not be the best. We are also looking for interns.
For internship, we ask students for solve some small programming problems. I got 40+ responses from 2-3 colleges. 35+ students have copy/pasted the code from internet. Come on guys, I am using google since before your birth. I can find from where you copy/pasted your code in 5 mins. I still talked with 3-4 students and realized that they have not taken any efforts to understand the code. They don't want to take any efforts. I have similar experiences of interacting students with few colleges from Pune (not naming the colleges). These students are essentially at the bottom and practically unemployable.
Where did the average students disappear ??? Expected "normal" distribution will mean small set of students at both extremes and large number of average students in middle. However, now we have 'skewed' distribution with really large number of unemployable students at one end and small number of top notch students at another end and nothing in between. How did we land up in such a bad situation ??