Aware of this conundrum, the Planning Commission of India recommended recently that eminent research institutes like the Tata Institute of Fundamental Research (TIFR) and the Indian Institute of Science (IISc) embark upon undergraduate education by establishing, for example, a TIFR-College and an IISc-College. The idea has had little traction with institutes however and has produced additional skepticism. Some of the researchers are concerned that teaching duties will seriously impair their ability to conduct world-class research, despite overwhelming evidence to the contrary.
The overwhelming evidence that teaching aids research is based on university systems in USA and elsewhere. It is a forgotten fact, however, that the tutorials and grading of assignments for the undergraduate courses in US are exclusively done by graduate students. The professors are hardly involved in these activities and this saves considerable time that can be devoted for research.
People who are favor of IISc college extensively argue that this will result in better graduate students doing doctorates in the country. Institutes like IITs, where faculty are involved both in undergraduate teaching as well as research, find that practically none of their undergraduate students go on to do a doctorate in India. Therefore, if IISc starts an IISc college dedicated for undergraduate teaching (which I think it will) and all the active research faculty teach in this college, how many of these students will go on to pursue a doctorate in India? My guess is less than 5%. Therefore, the input quality of graduate students to IISc will largely remain the same even if IISc and TIFR open colleges.