Indian employers find it laughable that Gordon Brown considers their country a threat to the UK economy when most graduates they interview can't muster an original thought - but one man is hoping to change that, says Amrit Dhillon

When Chancellor Gordon Brown recently invoked the spectre of millions of highly qualified graduates from China and India threatening the British economy, employers in India chuckled. "Which graduates was he talking about?" they asked. "The ones we recruit, who can't write a paragraph of correct English to save their lives and whose knowledge is so dated as to be useless?"

If Brown knew how human resource heads despair at the poor quality of Indian graduates and that Indian industry faces a shortage of skilled workers, he would relax. How a nation of 1.2 billion with half the population aged below 25 and more than 300 universities can be short of skilled workers is a mystery that Sam Pitroda, an Indian who left the country 20 years ago to settle in the US, is trying to unravel.

Pitroda is head of the Indian Government's new Knowledge Commission, an advisory body that aims to sharpen the country's competitive edge. He has been entrusted with the job of making Indians think, experiment and be creative. He plans to shake up the educational system from top to bottom in what he calls a "romantic" mission that will produce results not next year, not even in the next decade, but in 20 to 30 years.

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It might surprise foreigners to learn that Indian education is poor. They see Indian doctors, engineers and software writers everywhere. But Indian industry estimates that only a quarter of the country's graduates are employable.

Pratap Bhanu Mehta, a member of the Knowledge Commission, says: "India's poor human capital is a real problem that will hinder economic growth."

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People in the information technology industry, which needs 9,000 workers, are even more savage about Indian brainpower. Some call-centre managers say that only one in ten graduates is worth employing. "Just look at their communication skills," cries one exasperated employer at a Mumbai-based call centre brandishing letters written by would-be employees. One reads:

"As I am marrying my daughter, please grant a week's leave." Another says:

"I am in well here and hope you are also in the same well."

Fluency in English apart, employers complain that graduates lack creativity, reasoning and analytical skills and the ability to problem-solve, think critically and work in a team. The root cause of the crisis, experts say, is the mediocrity of much of the system, from primary to higher education. In the tertiary sector, the Institutes of Management and the Institutes of Technology are world class. But most of the lecturers in the 330 universities and 17,000 colleges are mediocre and their knowledge is out of date.

Author V. S. Naipaul was being his usual provocative self when he remarked that India had more than a billion people and no thinkers, but there is something in what he said. For example, Indians tend to copy much from the West, from furniture designs to Hollywood movie storylines and even dialogue. Pitroda says that the dearth of original ideas stems from a culture that discourages experimentation and curiosity. "Indian society is full of rules and rituals for every occasion and situation. From an early age, children learn to obey these rules. It means they don't think for themselves. If you combine that with a cultural tradition of deference to those in authority, you get people who do not question received ideas or try anything new," he says.

One of Pitroda's priorities is to get Indians studying the liberal arts.

Middle-class Indian families tend to abhor all subjects except medicine, engineering, accountancy and law. Since knowledge is considered a means to an end, not an end in itself, they see no reason to take a risk with, say, anthropology, when they are guaranteed a good job in medicine or engineering. Pitroda says: "Indians are risk averse so the liberal arts are out. But if we are to come up with solutions to India's complex problems, we need people with a liberal arts background who will think creatively and come up with fresh ideas."

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The Knowledge Commission will devise ways of encouraging Indians to enrol for liberal arts subjects. It also intends to tackle the dated curriculum in many universities and the tradition of rote learning. "Even at university, students memorise information and are not taught to think critically. There is no tradition of experimenting. Indian society does not reward failure - it's not seen as worthy or admirable. It rewards only success, and that discourages people from trying," Pitroda says.

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Pitroda is a perfect example of someone who has defied conventional wisdom and followed his own path. He was technology adviser to former Indian Prime Minister Rajiv Gandhi in the 1980s and became a telecom legend. Initially, India's chattering classes laughed at his desire to connect Indians through a phone network - they said poor Indians were in greater need of clean water, food and education. But they were wrong. He revolutionised telecommunications in India by taking phones to virtually every village. He is too modest to say so but India needs more people like Pitroda, people who can be original and then have the courage of their convictions. Pitroda is appalled by what is taught in universities. He cannot see how India hopes to achieve its ambition of being a superpower by 2020 unless it has better human and intellectual capital.

"A university professor boasted to me about how he'd used the same notes for 20 years. Think how much the world has changed. I reckon that 80 per cent of what is taught is obsolete," he says.

The Confederation of Indian Industry also complains that the material taught at university level is not relevant to industry. Mohan Rao, an entrepreneur in the energy industry, says: "I can't find project managers.

The people I've tried can't think for themselves or work out answers. I don't mind if they fail, but at least they should try instead of running to me all the time."

This is why big companies such as Infosys run virtual in-house universities to train graduates. New Delhi-based publisher Alok Brara does not even bother with graduates. He hires only postgraduates. "The system here is exam-oriented. Instead of learning throughout the year, students cram at exam time so they haven't really followed the curriculum or even attended lectures regularly," he says.

In a recent report, the World Bank urged those in charge of Indian education to ensure that students learn problem-solving, analytical skills and team work. Pitroda is exploring how the corporate sector can invest in educational infrastructure. Many universities, for example, lack good labs, equipment and well-trained faculty. "I want to see if we can get universities to hook up with faculty in the US or Europe so that students are exposed to the latest thinking in a field," Pitroda says, adding that India will have to use technology more imaginatively to overcome the ideas deficit.

Early next year, the commission will present its conclusions to the Government. "I'm not writing a report that states the obvious," Pitroda says, "I want to list 20, 30, 50 things that can be done quickly with existing resources within a fixed time." But nothing less than a transformation of education will satisfy him. "It's not a luxury but a necessity if India wants to keep up the momentum of its economic growth.

Having the largest and youngest workforce in the world is an asset only if it is educated and skilled. Otherwise, growth will slacken and unemployment will go up," he says.

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And if India fails to revolutionise education? "Lots of frustrated young men with no jobs and no hope will start burning things. There will be chaos and we'll be left behind other countries."