The US produces only 70,000 engineering graduates every year and all of Europe produces just 100,000. That's minuscule compared to what India's institutes churn out every year: 500,000, of which 30 per cent are computer engineers. It's a huge number, but industry in India is still suffering from a skill shortage.

Consider this: a survey done by McKinsey Global Institute shows multinationals find just 25 per cent of Indian engineers employable, and a Nasscom report sees shortage of 500,000 knowledge workers by 2010.

And, the UR Rao Committee had said India needs well over 10,000 PhDs and twice as many M Tech degree holders for meeting its huge research and development needs, but India's 115 universities and 2,100 colleges produce barely 400 engineering PhDs a year.

The reasons for this paradox are many and quite well-known: the lack of quality education, industry apathy and the mushrooming big "professional" institutes and so on.

But what isn't so well known is the phenomenal work being done by some of the smaller educational institutes in Maharashtra. A study done by the Tata Institute of Social Sciences for the Confederation of Indian Industry shows how some of these institutions have gone off the beaten track to meet the "skill problem" faced by Indian industry. In the process, they have ensured that industry-academia partnership flowers where it matters the most - at the grassroots level.

For instance, ITI Aundh, is not a top of the mind recall for industry. But the industrial training institute in Pune realised that true autonomy would come only when it depended less on the state government for funds and when it has an answer to industry's complaints about a disconnect between the skills imparted in the ITIs and the skills demanded in the market.

Solution: the institute has gone in for a strong linkage with industry. Instead of trying to be a mass producer of technically-trained manpower, it decided to focus on the automobile industry for obvious reasons. Pune is the location for big names such as Bajaj Auto [Get Quote], Tata Motors [Get Quote], Kinetic Engineering [Get Quote], Force Motors [Get Quote], Kirloskar and so on.

It also decided to turn the functioning of ITIs radically - a specific course curriculum was prepared and sent to the companies for verification and comments. The comments were incorporated into the curriculum to strengthen the industry linkage. The ITI also went in for joint ventures with industry. For instance, it organises non-CFC refrigerator training programmes all over Maharashtra in association with Hidecore and National Chemical Laboratory. So far, it has provided training to over 2,000 trainees under the programme.

Thankfully, ITI Aundh is not an isolated example in such industry-education linkages. Take the Indo-German Tool Room, Aurangabad. A project of the Indian and German government, the institute serves the needs of the tool and die industry.

For instance, the Indo-German Tool Room, Aurangabad, regularly sends its faculty members to industry and other training institutes for upgradation of skills.

Apart from setting up a full-fledged training centre that caters to the need of industry coming for short-term courses, the institute also carries out specialised training programmes for foreign students.

There are many other such examples. In People's Education Society College of Engineering, Aurangabad, students in their fourth year of study do a sponsored project with local companies such as Crompton Greaves [Get Quote], Johnson and Johnson and so on.

The ITI in Nagpur has also made a specific trade as a pedestal for industry linkage and has tied up with Mahindra and Mahindra for the diesel mechanics trade.

The Government Polytechnic College in Nagpur and Institute of Hotel Management at Aurangabad continuously change their course contents according to industry demands.

The Nagpur institute, in fact, has gone a step forward to set up a Rs 2 crore (Rs 20 million) technical education quality improvement programme. And IHM has entered into an agreement with the Taj Group of Hotels for on-the-job training.

Students are also required to undertake a live research project for a period of 24 weeks at the Taj Aurangabad.

Realising that such initiatives cannot be sustained on an individual basis, ITIs in Nashik, Pune, Aurangabad and Nagpur have started Centres of Excellence to equip students with multiple skills as per the needs of industry, and to give them employable skills.

These centres provide basic training for one year under the aegis of National Council for Vocational Training and have also set up an Institute Management Committee to make training demand driven.