Is employability for our Indian students a real issue?

There are many articles about our Indian students employable. First lets talk about what do employbility means. From companies perspective it means that people they are hiring should be productive from day one without any or minimum training.
Companies spend a good amount of money on training fresh graduates out of college.And still I have seen that even after an year of on job training, students struggle to perform the basic work required for there job.In this ear of slow moving economies, companies specially MNC's are struggling to get the business. And whatever business they are getting, is also at lower rates(I am specifically talking about IT industry here). And if you are not productive and not able to deliver the things, companies now days are not hesitating to show you the doors.

So whom to blame for the employability of the students?Is it our education system and our colleges, where emphasis is on the theory, Or to blame our Prof/lecturers or to blame our industry of expecting too much from students or to blame our students?
I think every one.

So what's the solution: I still remember my manager always told me, Vikram dont come with problems, tell me solution. So what's the solution to the problem of emploaybility. Lets de-scope the problem, and talk about the solutions for students. I still remember when someone working in the Industry came at our university to deliver a session on how industry works and which skills are important.

That session helped me alot and I started putting my energies in the right direction.I learned the right skills of learning basics of data structures, learning to do programming well, improving my communication skills. As a student, we have ample time to invest in upgrading our skillset. Frankly speaking, I still feel I should have better utilized the ample time I had during my college days.