I have a core job in mechanical engineering. It pays 5 Lpa through campus placement. Should I drop a year to prepare for GATE 2015 and get through PSU, or prepare along with the job?

I am NIT Engineer working in Manufacturing company (CTC 6 LPA). I am leaving my company to prepare GATE so I think I am eligible to answer your question. I assume you want to clear GATE for PSUs. I would advice you to take pen and paper and note down your work schedule. How much time does your job take? Do you have Saturday Sunday off? How hectic work you have to do at work? Now figure out how much number of hours you can put daily efficiently. If you can study well for 3-4 hours right from April to next January you can crack GATE easily (provided you sought good guidance). Now if you can't find that much time and you are too dedicated to achieve what you want (and bit confident) then you should go for drop. Remember as you grow the ability to take risks decreases drastically. So whatever you always wanted to do, do it now instead of mourning later. Best luck.

Even am in a similar situation as you. I thought may be I could work for 2 years in the company and then go for MS or get a job of 10 lpa pay scale using my experience.

My suggestion is Instead you enroll for weekend classes for preparation and then keep practicing all the days. As exam gets near you can request for leave for 15/10 days. If you crack exam then you can fight for interview and all other stuff and if you don't clear then you can continue working..