No criteria. I think the problem is with the low number of seats available. A similar quality of education can be made available at a much larger scale if the country is so motivated. It's understandable that not all branches of engineering at other universities can acquire the kind of funding that IITs have. Apart from some specialized lab equipment, there is no technical reason all universities can't offer a comparable quality of education all over India. There are only bureaucratic reasons.

Nearly 1 million, students try to crack IIT exam.

No.of seats available are 12-13k. That's nearly 1.3%.