I think the education system in India needs a revamp. The IITs are no longer what they used to be. The only real academic research institute in India is IISc and its intake is around 20 people per stream per year or so, if I am not wrong. Those who want advanced degrees (PhDs) leave for the US or Europe.
Also, the pays given to professors in India are pretty paltry. Furthermore, there is very little emphasis on fundamental research. Most people want to become engineers or doctors. Nobody wants to do Physics or Chem as a first choice (I am guilty of the same too). There aren't any jobs for BSc/MSc/PhD physics outside teaching. (See first line of this para). Govt labs in the US hire PhD physics to do fundamental research at a good pay. GoI on the other hand, pays them poorly and gives them an unprofessional work environment. ISRO, BARC and DRDO are probably the only CISR labs that are doing well. We all know what HAL has been up to... Like Madhavan Nair said, GoI needs to seriously reconsider pay packages for scientists, and increase pays in IITs/IIScs to hire good research talent. Allow foreign institutes to open research centers here. GoI can also support these institutes by awarding defence or space research projects to academia. Dunno if it will help, but just my 2 bits. Seems to work in the US...
