The reason for the state of education, especially the schooling upto grade 12, is the short term view of the parents (primary), teachers & school management (secondary, but quite close on heels of first) and easy route taken by students who don't have good role-models.
Parents are the first role-models. Hence, if the parents are going to have crooked views, short-term blind plans, etc., the children take that as the "life-time goal". First damage is done there. Secondly, the parents hand-in-hand with teachers look at just the number of marks & the number of students who pass the exams (100% pass) as the goal to be reached. Learning for "life" is forsaken in order to learn for the sake of marks. Next generation has learnt the wrong ideals and not only dont fare well, but they also follow same methodology with their next generation.
With high population, it is difficult for the limited supply to be apportioned to candidates. Hence marks have become the only way to win the race. No one seems to look at the fact that most students who are at the top in school are not so in life - they end up being pretty average in performance, goals, position, earnings, etc.
Many of the students who were scoring average, but had learnt the important points in life - communication, networking, being part of a team, natural leadership, etc., have become the leading lights in every sphere.
So, parents and teachers should really build the "citizens of tomorrow", rather than use that term only as a cliche in every public parade of their wards, while practising otherwise. One generation has to start this education of all 3 sets of people parents, teachers+school management and students. Then future generations can reap the fruits - fruits don't come on 7th day after planting a Mango sapling...