I would like to argue that there is absolutely no reason for this inferiority complex. Indians are as industrious as any of the other peoples of the world; some of the world's smartest minds are (and have been) Indians. (note that this is not a nationalist statement - one in 6 people in the world is Indian - and therefore, stands to reason that approximately 16% of the smartest people in the world are Indian)
In this article, I'd like to highlight a talk by one of India's (and humanity's) biggest fans, Professor Hans Rosling, whose talks in TED are a huge attraction. In a very unique and quantitative way, Professor Rosling professes a very optimistic and rosy view about all of humanity, India included. He is of the firm belief that the average Indian will achieve a western standard of living within a single life-time - and he proves this by extrapolating trendlines is his TED Talk.
Economists agree that a young developing nation (with a lot of people in the "earning" age of the population distribution) is more likely to grow (and frankly needs to grow). Nations like Russia and Japan have lots of old people (an inverted population pyramid); as a consequence, no one expects them to grow very significantly. Of late, China has been making use of its demographic "dividend" growing at consistent astronomical rates since 1979. (However, due to their draconian one-child policy, it is expected that their growth will decelerate soon). India also has a demographic dividend - that's part of the reason why the last 10 years have been the best in India's recorded history, as far as average economic growth rates are concerned. However, there are growing concerns that the dream is rapidly fading away due to the cowardly policy stands of the center government. And slow growth right now will be nothing short of a humanitarian disaster - as the hundreds of millions of India's young need jobs.
There are several ways to put a population to work. And not all of them are equally successful. Consider this: America was not always as rich as it is now; Japan (with the same population density as India) was not always as rich as it is right now. China was poorer than India 30 years ago. In almost any region that has achieved "western" levels of per-capita incomes one thread is common: freedom. Economic freedom. When you allow people to do what they want to, it just happens that they do a good job of it and generate wealth. They generate wealth that no amount of central planning ever could. And this wealth generation is the best way to mitigate poverty.
As someone who has spent a lot of time in America's universities and in the silicon valley, I would like to reiterate that Indians are as capable as any other race. There is nothing that his necessarily holding India back, other than a lack of economic freedom; something that politicians in India have annexed in the name of "socialism". India has been experimenting with socialism over the last 60 years. While there have been significant strides made (e.g. in fostering a robust democratic tradition, something most countries in the world still struggle with), India is a significant laggard in human development. Data shows that this is due to an oppressive regulatory environment that has stifled economic freedom.
It is up to the people of India to make their vote count and to take the side of economic freedom and rapid development.It is up to the people of India to make their vote count to make prof. Rosling's vision come true. The key to good human development at the bottom of the pyramid isn't hand-outs and subsidies; it's economic freedom, entrepreneurism and free enterprise.