Govt. has done nothing to promote IT, they are on its own( like becuase of English speaking people, most of the govt. school or regional langauge as medium of instruction)
If other sectors pay well, like advertising,pharma,oil etc, people will go there to work. when it comes to the employee distribution, IT is nothing.
people will go where there is money. People will leave IT easily, if they get better pay in Muncipality as well.
Finally, it's money that's calling the shots. Indian engineers are not lethargic or lazy, if you don't believe this, then check the Indian presence and capabilities in NASA, MIT, ISRO,GE, BOSCHE, BHEL, Caterpiller, Carrier... etc.