rsathish, you are seeing history repeat itself.
The first burst of Indian private Aviation carriers started in the early 90s. Within a few years, there was a bloodbath, and 2 of the carriers survived - Jet and Sahara. About 5 years ago, the second burst of private Indian airlines started, owned mainly by entrepeneurs who had no background in aviation, and run mainly by Indians who either had no aviation background or who had only operated in India. No-one was ever going to take a train again, everyone could fly for a few Rupees to anywhere they wanted in India. You got 5 aircraft to gain your scheduled carrier licence from the DGCA, and after that you ordered whatever mad number of aircraft came into your head with Airbus or Boeing. Your stock kept going up, and you could sell in a couple of years to someone else and retire with a fortune. Anyone could become a pilot (a JET pilot, that is, none of that turboprop stuff), earn hundreds of Lakhs, wear shades, have someone carry your bag and call you Captain, and have hosties lining up to hump your leg.
No-one foresaw the current recession which hasn't helped, but it didn't need a doctorate to see from outside what was going on in India would end in tears at some stage, and that there would have to be a Mark II major sorting-out. You can't keep running airlines at a loss, and have "Low-Cost" airlines in a high cost environmment - the Indian states can't keep charging stupid amounts of tax on ATF, have an inadequate aviation infrastructure, and think it will go on forever. It has now got to the stage where Indian airlines are cutting orders, leasing their existing aircraft out of the country, and experienced Indian pilots are leaving for expat contracts elsewhere. It will stabilise, but it has some way to go yet, some more tears will be shed, and the ones who came in on the tail end of the wave will suffer most.
Lest anyone think this is anti-Indian (I'll leave that to morons like GBB), unfortunately stupidity is a universal trait - look at all the Americans and Europeans who thought that their house price would never fall, and banks who lent to people who would never pay them back. Aviation in India has a long way to go yet, but dealing with reality and retrenching first is essential.