Economic Research in India has company. .
Nirmalya Kumar of LBS in this article points state of management research is even in a worse shape:
To assess the state of business research in India, we examined data on authorship of research by India-based authors for the period 1990-2009. We chose a widely-accepted list of 40 journals that the Financial Times uses for ranking research at business schools in their annual global MBA rankings (www.ft.com).
Over these two decades, the total number of Indian author count was 132 (108 unique articles, or about 5 articles per year for the entire country). This is not an impressive number by the standards even of a single leading global business school.
For example, schools such as Hong Kong University of Science and Technology (about 100+ faculty members) currently produce about 30-plus articles annually, whilst a larger business school like Wharton (200+ faculty) produces about twice as many articles. However, there are some interesting and encouraging signs.
For more details on the data and methodology, readers are invited to our Aditya Birla India Centre website at the London Business School (www.london.edu). We are committed to updating this list annually. Since this is the first year we have conducted this exercise, our methodology will undoubtedly evolve; feedback and suggestions are both welcome on how to improve it.
The results are here.
Kumar points there has been a shift in who is doing more research:
First, historically, in the 1990s, the most productive institutions for business research were not business schools but the Indian Statistical Institutes (ISIs) in Calcutta and New Delhi. However, in the 2000s, the business schools had clearly taken the lead with the Indian School of Business (ISB) at Hyderabad and the Indian Institutes of Management (IIMs) at Bangalore and Calcutta.
Second, amazingly, a new school, ISB at Hyderabad, has managed to wrest a leadership position in research over the more established IIMs despite publishing their first article in our sample in 2003! This is also one reason for the high ranking of their MBA programme by the Financial Times. In our view, the research culture at the ISB plays a large role in creating this intellectual advantage.
Few researchers have been exceptional:
The faculty members in India who have been the most productive researchers as measured in our study are P Chaudhuri (ISI-Calcutta), S Juneja (IIT-Delhi and Tata Institute of Fundamental Research, or TIFR), D Kamdar (ISB), A Sen (ISI-Delhi), B K Sinha (ISI-Calcutta), E S Srinivas (XLRI) and S Swami (IIT-Kanpur).
Some stern words from Kumar:
If India is to go from being an imitator to an innovator, we need our leading academic institutions and faculty to produce world-class research, and not be satisfied simply with producing good students through a competitive selection process and competent classroom instruction.
This is an imperative for the country given the large number of youth who aspire to go into management, the exponential growth of business firms and the increasing globalisation of Indian firms. After all, why should all the Indian management gurus be based outside India?
It is a pity really to see the state of education in India. We have enough problems with primary education, but think all is well with the elite graduate and under-graduate schools in the country. But as this blog has repeatedly said (here, here), things are pretty bad at higher level as well.
We are judging an institute solely on the basis of its placement record/ salaries its students are getting. It should just be one of the criterion if at all one. The quality of academic institutes at higher level is based on the quality of research. Nothing more nothing less. We have the toughest competition in the world to get through Master/Bachelor programs in these institutes. But there is hardly any demand for their PhD/Research programs. So, we are running into a situation of having many students but poor supply of quality teachers. It is ironical really. Worldwide institutes take a great pride into their PhD programs and make efforts to invite top class researchers. Here, it is all about churning students. This blog struggles to find any decent economics papers written by an India based institution which could be covered on the blog. Then, one hardly sees any papers/case studies being quoted in any mainstream media?
A wakeup call to the ivy leagues. Are they listening?
Mostly Economics 
February 7, 2011 at 6:44 pm
The argument made by you & Mr N. Kumar is absolutely right, but I wonder, why such dire situation is there? Is it because, the rewards given to students (or even to Faculty) are based upon what grades or marks he/she secures? In this case, how successfully the faculty dose the placement? Or lack of Govt incentive..? What is that bars so much talented people taking from Research activity?
Given the fact that, so much good work done by Indian talent abroad at elite Universities, apparently answers of these questions could give solution to these concerns…
Regards,
Prasad B Shete
(sprasadco@gmail.com)
February 8, 2011 at 3:32 pm
It is beyond a shadow of doubt that the IIMS do very little research that is published. Probably the reason is that the Institutes are still grappling with the question: what is the type of research that the Institutes of management should do? Also, much of the research that the IIMS do in consulting assignmenst is not published. When I was a graduate student in the University of North Carolina, I never faced this question. In the early part of my career I published papers in renowned journals of Statistics. However, after I joined the IIMA in 1962, the direction that my research should take was not very clear. Would application of known ideas for resolving a significant practical problem be considered research? Would the research that I do for solving the problems I face in consulting assignments be considered research though I cannot publish it immediately? Why is case writing not considered as research? Though much research is required in writing and analysing many cases. Further, getting data from organisations for publishing papers is difficult. Please consider these issues before passing a judgement that IIMS do little research.