Those people trying to understand why there is this level of mess in the Indian IT, let me give you some perspective. India was large a socialist economy focussed heavily on self reliance before the 1990's. To be precise 1992. This had both good and bad effects. Unions were rampant, production and engineering were largely focussed on delivering services and schemes administered through the government. Computerization was its bare minimal as unions largely thought of automation as some kind massive job killer. Trust me when I say this the luddite movement back then was so crazy there were national strikes every time the government tried to anything progressive.

Round about the same time, around mid 1980s, people were tiring as they were watching west take leaps way ahead of India. There were a few companies building products and providing services to many firms back then. They were not exactly very successful but they managed to hang on. Until 1992, when India opened up its markets. Import regulations were relaxed, and FDI was encouraged. Round about the same time, US and Europe was gradually outsourcing bulk of its work to India. These companies thanks to double benefits of both the sides of domestic and international economy, now experienced run away success. Early employees tasted success and growth never witnessed in the history of Indian economics. Companies grew 100% YoY. Head counts increased by 2x every year. Most employees came from middle class to lower middle class families. These were promoted in waves after waves, year after year. You could easily net a decent mid to senior management position in 5 - 7 years. They also got to travel abroad frequently, some of them even settled in US and Europe. Land prices in Bangalore and rest of India were at scrap levels. Dollar exchange rate to rupee was 35-40 rupees. So you had a lot of value available for bird feed prices. Salaries of course were gargantuan. While the ordinary Indian worker made a average of 5 - 10 K a month, Im talking of the really well of ones. Software and IT folks made in lacs, bonuses came in lacs. Stock options came in crores. Back then these kind of riches were unheard in Indian middle class households, unless you came from politics or bribe giving government jobs.

IT jobs now became the most sought after jobs in India. Needless to say this also caused a lot of bad habit to creep into most companies. Almost everybody aspires to be a manager. Largely because the perks are just too awesome, all you have to do is forward emails, circulate memos, approve leaves and do appraisals. It was the Indian private company equivalent of posh sought after Indian administrative services jobs. You get paid disproportionately more in all possible ways, Salaries, bonuses and stock options. You also get to travel business class frequently. Think of it like fully paid luxury vacation every few months.

Companies now have layers and layers of dead wood unproductive management, consuming too much resources and providing little to zero value in return. Most junior level folks are completely unmotivated to pursue a hard career in tech due to dismal financial prospects. Many mass immigrate to west to catch up on lost years. Every time US has a recessions these companies benefit as work gets outsourced. When US economy is good they get shafted.

VCs and US firms largely pay Indian salaries. Start up scene is not bright either. Most are started by Ivy league folks and graciously over spend all the cash on paying fat salaries to people from the alma mater. In short, with money drying up and automation coming in. Management jobs are getting eliminated. Not enough free money to go around. Many junior level testing and first/second line support jobs too are going. Next crash will be ugly. People will lose homes, jewelry will be sold. Kids will be pulled out of international schools.

They can't be reskilled and re-employed for the same reasons why someone weighing 150 kgs can't one just wake up and run a ultra marathon. Too much of entitlement.

Lastly this is just a repeat of the decade of the 1990s. With liberalization bulk of the people got shafted the same way.

Free money never did any good to people on the longer run.