The Economic Times is carrying a report that states that India is significantly short of skilled manpower.
Though brain drain from the leading institutes and stagnant output of engineering colleges definitely contribute to the manpower shortage, the software industry itself has contributed to the state of affairs.
A good portion of the exports of software industry can be attributed to "body shopping", in which people are placed on-site overseas for long periods of time. Body shopping inevitably leads to brain drain. When people are sent for a long period in the US, it is inevitable that most such people will end up staying in the US, given our almost blinding attraction to the West. The software industry knows this quite well, but to meet the short-term targets and to make easy money it continues the practice.
Now, who'd have thought..