He was addressing at the eighth convocation of the Rajiv Gandhi Technological University here.
Mukherjee said that many meritorious Indian students seek admission in foreign universities today and added that it would be possible to revive the lost "glory" of India's ancient universities if this pool of bright students could be retained.
"Upgrading standards of higher education should be by a culture of excellence," Mukherjee said.
He said that only one in 50 patent applications in the world is filed in India and pointed out that much more needs to be done to be at the forefront of innovation.
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He claimed that for 1800 years beginning in the sixth century BCE, Indian universities like Taxila, Nalanda, Valabhi and Vikramshila "dominated" the world.
Taxila was a global university and the meeting point of Indian, Persian, Greek and Chinese civilisations, he said.
Higher academies have a shortage of good quality teachers and added that unless existing vacancies are filled up and capacity of our teachers developed, steps towards quality improvement will remain incomplete.