Since it isn't explained in the article:
IIT: http://en.wikipedia.org/wiki/Indian_Institutes_of_Technology
IIM: http://en.wikipedia.org/wiki/Indian_Institutes_of_Management
IIT: http://en.wikipedia.org/wiki/Indian_Institutes_of_Technology
IIM: http://en.wikipedia.org/wiki/Indian_Institutes_of_Management
It is not all that hard to get into an IIM these days actually. IIT is definitely hard at the Undergraduate level (and harder than any US institution) primarily due to the sheer number of students trying to get in. The coursework is also pretty tough. Vinod Khosla( a co-founder of Sun Microsystems) said that after doing his undergrad in IIT Delhi, higher studies in Carnegie Mellon and Stanford were just a cakewalk.
Last year 1,73,735 candidates took the CAT admission test through which the IIMs admit 3,335 MBA students. That's a 1:52 ratio.
Now you could argue that not everyone who takes the CAT is an IIM applicant. So let's take IIM Ahmedabad's (slightly dated) data for 2006-08 admission [1]. Of the 1,44,027 who applied to the institute, 273 secured an admission. That's a 1:527 ratio.
Harvard Business School's admissions:applications ratio is 1:12 [2]
I'm sure you have an explanation of why a 1:527 ratio is "not that hard".
[0] http://www.business-standard.com/article/management/boys-rul... [1] http://www.iimahd.ernet.in/institute/about/key-facts/institu... [2] http://www.hbs.edu/about/facts-and-figures/Pages/mba-statist...
Plus in the scale of India's population you get a lot of kids, who are working for years to crack the examination. So the only way to create a selection process is to have a crazy difficult exam.
If that is the case then you can't compare the numbers directly, since you have a very non-trivial number of students who are rolling the dice.
In contrast Harvard is very upfront about their requirements, causing most people to avoid applying if they won't qualify.
That's just plain untrue. The problem is IIT alumnus works double time to do their marketing. The IIT entrance exams are super difficult to ensure only the most hard working of all India gets through. This inturn creates a situation where you have all that good people at one place. Its but other wise obvious they do well.
But to say the ordinary Indian doesn't do well is plain wrong. Today's India was built by ordinary guys. The IIT'ians well most of them contribute to the growth of countries like US, not India.