The hyper competitiveness seems to be a problem. I'm not sure what the answer is, but students need a way to be able fail honestly without shame so that when they do succeed, they do so without needing to cheat.
It's a cultural thing. It's literally a do or die situation for everyone to do well in school. Or you would have shamed your family. But, things are getting better, as cultural expectations are subsiding. I think in the next couple decades, India will be on par with the West in terms of social expectations as the average gross income and GDP of the country continues to go up. I think China is starting to see the same thing now.