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In real-world situations, engineering leaders are needed who are skilled to understand and address significant engineering problems. Industries now seek engineers who are technically capable as well as possessing leadership skills. The pace with which technologies are emerging amid economic chaos underscores the need for effective leaders. Global recession has drawn attention toward equipping future engineers with leadership traits. Employers while recognizing technical knowledge as of prime importance also consider leadership as instrumental in realizing organization's goals. Educational institutes across Europe, US and Australia have been offering engineering leadership education in various formats. Although most of the programs have been offered for the last five years or more, still there are some challenges associated with the development and implementation of engineering leadership education which need to be overcome. The purpose of this paper is to highlight the rationale and challenges of the engineering leadership education in the current economic scenario.