Joshi, a former Union HRD minister, also suggested that the government assess the country's technological power before introducing development schemes.
He regretted that the highly skilled human capital churned out by IITs and IIMs are only helping developed nations as they are working in the direction which do not consider Indian problems.
Joshi was addressing the 5th National Summit on Instituionalising Academia-Industry interface organised by PHD chamber of commerce.
"Vajpayeeji had mooted a wonderful idea of quadrangle roads. But even before the concept plan for how the roads will be constructed was worked out, Volvo came up with buses that can be run on those roads. It is good to borrow technology but ultimately our projects don't generate employment and revenue for our youth but become a profit making ground for others.
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Joshi said the IITs and IIMs are not serving the very purpose for which they were established and that they are working in the directions which do not consider Indian problems.
"They are the premier institutions of the country, if their training cannot retain the talent here to address the problems in the country means they do not have substantial interest in training for the Indian market," he said.
"What are they doing? Are they producing managers for agriculture, horticulture, hospitals, sanitation, electricity supply? Have they produced someone who can be a manager of the traffic situation in Delhi? No, they are only focusing on accounts, marketing and packaging, so that the students can go and settle abroad," he said.