"We are placing limits on opportunities for our youth," he said.
Dr Singh also said that India needs "national leaders" from the fields of science and engineering, and not just from "politics, sports and cinema."
"This is precisely why our government has taken initiative to expand the opportunities for higher and technical education in India," Dr Singh said.
He also stressed that the investments made in higher education must contribute directly to nation building. IITs face an immediate challenge of making their curriculum more relevant to the country's needs, he added.
Speaking on the occasion, Union Minister for Human Resource Development, Kapil Sibal said that IITs have been "Centres of Excellence", and India is proud of their contribution. However, he said, the IITs are facing a critical shortage of quality faculty, and most of the current faculty is ageing and nearing superannuation, which is affecting academic productivity.
The brand equity of IITs is due to the excellence of their undergraduate students, Mr Sibal said.
On the occasion of the Golden Jubilee Convocation, degree of 'Doctor of Science - Honoris Causa' was conferred upon industrialist Azim Premji, who is the Chairman of Wipro Ltd.
"Never stop learning. Have confidence in yourself. Excellence is not an art but a habit. Never compromise on values," Mr Premji said.
A total of 2006 degrees, including 175 PhDs, were awarded.
(With inputs from PTI)