Her article in the Chronicle of Higher Education covers many different views (including mine) on this problem. You can read all of it on her website.
Here's a description of how grave this problem is:
A report released last year by a parliamentary committee outlined the magnitude of the crisis. At 16 universities under federal control — considered the country's elite — as many as 1,988 faculty positions lay vacant as of March 2005. The committee said the problem is probably even worse at state universities and that "drastic steps need to be taken so that students are not deprived of proper guidance."
The situation has changed little since then. At the Indian Institute of Technology in New Delhi, for example, 29 percent of faculty positions are unfilled. At a recent graduation event V.S. Ramamurthy, the institute's chairman, called the situation "a disaster in the making," and said it needs to be tackled on "a war footing."
At lower-rung institutions like the regional engineering colleges, which suffer some of the most acute faculty shortages, courses are left unfinished or untaught. In June, a number of third-year students at Jalpaiguri Engineering College, in the state of West Bengal, went on a hunger strike saying that they were unprepared for exams because no classes had been held for six months. These students were supposed to have 20 full-time professors. They had one. Administrators tried to recruit more faculty members from other institutions but realized that many of them didn't have enough professors to meet their own needs.
Naturally, there is a section on faculty salaries, and this is where I get quoted:
Professors and administrators say that flexibility in setting salaries would go a long way toward fixing the problem. As it is, India's notoriously bureaucratic higher-education system is hobbled by rules under which professors, no matter how brilliant, are treated like civil servants. "Even if you get five Nobel Prizes, you can't get more than what an additional secretary [a bureaucratic position] earns, which is something like 45,000 rupees a month," or $1,120, says C.N.R. Rao, scientific adviser to the prime minister. And a bureaucrat typically has a lot more perks and power.
Because strong performance is not rewarded, all assistant professors, regardless of how much they have published, earn about the same."There ought to be some way of measuring the usefulness of a person, and this mechanism has to be created anew," says T.A. Abinandanan ...
Perhaps I can elaborate on this a bit: As some of you might be aware, I am against across-the-board salary hikes simply because our system does not distinguish between a high performer and an also-ran. In particular, it does not have a way of getting rid of poor performers, because government jobs come with life-time warranty.
Thus, I would like faculty job contracts that specify a certain minimum basket of activities for which a base salary is paid. Any performance over and above this minimum earns the faculty member an additional salary. Such a salary structure does not exist, and it is probably worth working towards.
However, even within the current paradigm of equal pay for unequal work, certain incentives can be built in to encourage faculty members to do more of things that are aligned with an institution's mission. Currently, industrial consulting is the only route for a faculty member to earn an extra income. But this route is not available for basic researchers.
Thus, I would recommend allowing a salary component for faculty through their externally funded research grants. Remember, this is already possible if the research grant is from private industry, philanthropic organizations, research foundations, or a foreign funding agency. It's only our government agencies that do not allow a salary component.
* * *
I have argued that salaries, while important, are only one of the reasons for the facutly crunch. Our institutions must do a whole lot of other things (which are easier to accomplish particularly because some of the elite institutions are now enjoying an era of unprecedented riches) if they are to become attractive destinations for top faculty talent.