Well, this is an interesting and also involved question. In my poinion, the problem is not so much with the education system than with the selection process for the teachers and professors and their continuance. During pre-independence days, the education system given by the British gave us two noble laurates and eminent jurists like Ashutosh mukherjee or luminories like 'Lal. Bal and Pal'.
Even the present education system has given engineers and doctors that are making significant addition to the GDP of countries like USA and UK. The IT revolution that is changing the face of the country is owing to the efforts of products from the present education system only. If the education system was so bad and useless, this would not have happened. Our students study not only the books by NCERT but all standard books McGraw Hill or Elsevier, which the student of the western world also study.
So, where lies the fault? We say that our boys are too bookish and are not application oriented and hence can not find jobs here. But the same boys when go abroad are able to do wonders there. How come? Does this not indicate where the fault lies.
It is in the political system that is interested in making money for the politicians and the bureaucrats only and not in endeavours that makes money for the country and provides job opportunities. In A.P. for example there are so many engineering colleges to day that seats are going abegging. Has not some one made money in the process? What about the quality of professors, laboratories, and facilities to do experiments? Unless we look into these aspects how can you expect world standard products.
The system of giving recognition and awards to our scientists is such that only psycophants and psedo- scientists can get recognition. Can you name a product of internetional standard, which is the out come of Indian R & D, be it of CSIR, Atomic energy or Defence research? And all the country's resources are squandered on these organisations, thus universities are kept languishing for funds.
So if one is serious to revamp the system, all this has to be considered. And govt sponsored research must be able to pay for itself at least 50%, earning the revenue thru exports. Then automatically the teaching and research will become productive. Otherwise the countries resources will keep being drained on politicians (salaries, perks, securities, travel etc), bureaucrats and 'sarkari' scientists. And our boys will keep fending for themselves.