This is a far more interesting question according to me. The root cause is a perception that I (as taxpayer) is investing money on someone else’s premier engineering education. Hence I have the right to question how the education being imparted is utilised.
Even if IIT grads start getting jobs in India as Sinha argues, this perception will not go away. People will say why aren’t engineers contributing to nation building? Why are they not joining ISRO, BEML, BHEL? Why are they working for multinational companies in India? They are just minting money etc etc.
This perception can be countered only if government sets IITs free in all respects: including governance, fee structures, faculty appointments, and exams. Government can retain the existing reservation clauses and offer scholarships on income grounds but nothing more than that.