Many of the horrors of the system -- such as the huge capitation fees collected in defiance of the law -- could, in hindsight, have been predicted by an average sentient being. Why then was such a system put in place to begin with? What was the nature of the debate that led to the current system? I wish I knew the history of the system.
On the issue of reform, I agree with the opinion expressed in the final paragraph by Dr. Samiran Nundy, chairman of the department of surgical gastroenterology and organ transplantation at Sir Ganga Ram Hospital, Delhi: There should be a common entrance exam and a common exit examination for all who wish to be recognized as doctors in India.
The government should lift all restrictions on fees; price control is not working. And the system of government medical colleges has been a disaster. In 2014, "616,982 [candidates] took the All India Pre Medical Test to qualify for 2503 “open” places". And this is in a country of more than a billion people!
After eliminating all restrictions on fees, the government should then regularly publish data for every medical college -- government and private -- on the fees it charges, the profile of its admitted students' scores in the common entrance exam, the number of admitted students who took the common exit exam, and the profile of their scores in the common exit exam. This information will help prospective students to do some comparison shopping.
The other problem is how to help students from poor families pay the steep fees without helping the rich or those who would eventually leave for lucrative careers in other countries. Here's my proposal: After a student from a poor family is admitted to a medical college (government or private), for every fee her family pays, the government will deposit an equal amount into a special bank account in the student's name. The student's family will be able to decide how the money is invested (in stocks, bonds, whatever). After the student's education at the college ends -- successfully or not -- the family will be able to withdraw the money in the special account, not all at once, but in staggered annual amounts over the period equal to a typical Indian's professional life, with the proviso that each such fixed withdrawal would be allowed only if the student was an Indian resident during the year or no longer alive.
I am aware that my proposal has glaring weaknesses. Please feel free to criticize; I promise my feelings will not be hurt.