The Indian Institute of Technology, the country's most famous and prestigious engineering school, has failed to produce a Single Nobel Laureate despite the government pouring "thousands of millions of rupees", noted a joint Study of industry body Assocham and Mumbai-based Tata Institute of Social Sciences.

"While the much touted IITs have an annual enrollment of 10,000-15,000, focused only on the brightest of the bright, not a single great worldwide patent has emerged, nor have they produced a single Nobel Laureate," the study says.

IITs have failed to create a mark when it comes to research and innovation because 90 per cent of funding earmarked for the Education sector is used for payment of salaries and creating physical infrastructure, the study found.

"We still do not have a single equivalent of a Google, Facebook, Microsoft or Walmart or a Nike. Even a small country like Italy or Finland does better!" said DS Rawat of Assocham.

The skewed funding plagues not only the IITs, but the entire higher Education Sector, resulting in "sub-standard" quality, the study revealed. As a result, Indian students spend $7 billion or around Rs. 45,000 crore per year on foreign education, the study found.

"Indians spend about $6-7 billion every year in sending their Children Abroad for higher education. It is not just the elite who spend generously on a good education and credentials but the middle class families also spend their life time savings to educating their children abroad," the study noted with concern.

Interestingly, the money spent on foreign education is nearly 60 per cent of the funds Finance Minister Arun Jaitley has allocated to the education sector for next fiscal.

Indian universities have little money for research and innovation, the biggest reason why India ranks lowly when it comes to new patents and start-ups in technology and innovation, the study says.

Brain drain is another factor that hampers world class innovation in the country. According to the study, many IITians who go abroad for research do not return home after obtaining their doctoral programmes.

Rabindranath Tagore, CV Raman, Mother Teresa, Amartya Sen and Kailash Satyarthi are the five Indians who have won a Nobel.