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The CS engineering programme usually deals with how to build micro processors, how to write a compiler etc. IT is the business side of computers - usually dealing with databases, business, and accounting. One way to think of it is that IT deals with the application of computing technology to real life processes and CSE deals with the science that facilitates these applications.
Further, while CSE focuses on the foundation of computing, IT as a discipline focuses on satisfying the computing technology needs of organisations. So, in a continuum between principles and application, IT focuses more on application, with the goal being to apply knowledge of computing sciences for solving problems. However, as the foundations of IT are in Computer Science, Indian universities and colleges deem it feasible to have a CS-based IT programme. This allows a graduate of the programme to choose a career in CS or IT, based on their choice and availability of job prospects. And mostly corporates make little difference between these disciplines while selecting students.
The nature of the industry requirements in the country also plays a crucial role. Since most of the companies in this sector focus on application development and maintainance at best, the need for hard core reserach level employees is minimal. So even if a student is taught subjects like chip design architecture, machine level languages , his or her chances of getting a career in that domain is minimal.

If you have an interest in computer hardware and software but you arent sure which career path to choose, you probably want to learn about information technology (IT) and computer science. These two rewarding careers each require a slightly different set of skills, and they each appeal to a somewhat different type of person. An IT career involves installing, organizing and maintaining computer systems as well as designing and operating networks and databases. Computer science is focused entirely on efficiently programming computers using mathematical algorithms.
An IT career doesnt necessarily require a computer science (CS) degree, although a CS degree opens certain doors that otherwise wouldn't be available. IT professionals typically work in a business environment installing internal networks and computer systems and perhaps programming. Computer scientists work in a wider range of environments, ranging from businesses to universities to video game design companies. Both of these careers have excellent growth potential and high salaries, with software developers somewhat ahead of IT professionals in earnings.

Generally good B-Schools will give you one year of experience of all the streams(mainly finance, marketing, HR, Operations, etc). You will gain interest in one of these fields and you will have to choose your specialization in the 2nd year. So choose the stream you have interest in and you will excel. The better stream is the one in which you have interest and can see a future in. MBA has a scope in all! Trust me it does! Its just some colleges are good in specialization and some in another. For example MICA is good for marketing, SIBF for baniking, IIFR for finance, etc. But mostly the colleges provide good experience all around! Good Luck!