Yes this is applied by some companies in India, however the reasoning behind it needs some explanation. Personally in my college there were around 350 CSE and IT students. The top companies(in India) say your Amazon, MS and Google have a lengthy interview procedure and cannot possibly go through this will all the students. So they screen grades.Note that, this happens typically only in the second tier instituions and not the premier institutions which do not have the problem of a huge student strength. For this reason typically students from other majors(electrical,chemical etc.) are also not allowed to sit for programming interviews.
Sadly many students will ask - "give my code away? For free!?"
This will also probably lead to "Heck, the code is free, let me copy it."
Also on the point of getting interviewed - most companies just want someone who can learn, and has good enough grades and a workable grasp of English.
Once you pass the tests, you are sent to their training centers where they will teach you whatever skills you required. The Tata training campus and is course is considered to be the equivalent of a 2 year Comp Sci. education in India.
Having a good grasp of code, is not necessarily an asset to get you into those jobs.If you want to strike out on your own and jump ahead of the curve, then I can see the merits of the suggestion.
