A recent report submitted to the Planning commission of India laments that the total number of Ph.D’s in engineering is very small in spite of “good” academic salaries. In fact, the report cites the study that discusses the faculty salaries across various countries. This study ranks India the highest in terms of the Ratio of Average Monthly Faculty Salaries, in World Bank Parity Dollars, to GDP Per Capita. This ratio for India is 8.73 compared to USA(ranked 12th), which is 1.67. Therefore, the report to the Planning commission wonders why do not more people enter academics. The report wonders why only 1% of the graduating B.Tech class of an IIT opts for a PhD in India.
At this time, it may be interesting to dwell on the statistics. The sanctioned strength for the number of undergraduate (B.E/B.Tech) is 5.6 lakhs per year. Roughly, 4.6 lakhs actually graduate with engineering degrees every year. Last year, 2.4 lakhs among these were picked up by the IT industry, 1.95 lakh students write GATE, 24 thousand write GRE. The total number of Ph.Ds graduating in India is around 1000, with IITs/IISc graduating 50%. Thus, roughly only 0.2% of the engineering students actually do a Ph.D in India every year. Therefore, I am indeed surprised that as high as 1% of the graduating B.Tech class of an IIT actually opts for a Ph.D in India.
Regarding the salaries, the authors of the report to the planning commission must instead compare the salary of a professor with ten years experience in IIT with the salary of a B.Tech from IIT. My guess is both would be drawing the same salary. Considering this, it is not a difficult choice for a B.Tech not to choose academics. This has nothing to do with GDP per capita.
Having said that, I would guess that roughly 1% of the B.Tech graduates from IITs do become faculty in IIT or IISc after completing a Ph.D abroad. This is not because the salaries are good compared to the per capita GDP but because IIT/IISc provide you with a great research atmosphere to work.