I have worked as an Assistant professor in India and can tell that the salary of an assistant professor in any state college or university is very much comparable (sometime even better) with international standard if adjusted against the cost of living.
Right now there is a lack of adequate central system for advertising of the academic positions all over India online and clear mechanism for appointments. There should be central website where all institutes should advertise open position obligatorily.
I have always been confused by the cost of living comparison. Consider that an assistant professor in India earns $10000 a year while his/her counterpart earns $70000 a year i.e., seven times less. An independent house (not an apartment) near IISc would cost you $250,000, which is 25 times the yearly salary and thus almost impossible to buy. Even houses in my native town are around $75,000. My friend once did a small analysis based on what a typical south indian family buys: rice, milk, vegetables, fruits and standard FMCGs. The cost (at that time) per month came out to be $200 in India and $400 in USA. So, it is a significant portion of the salary in India. Though services like having a maid or a car driver or eating in restaurants or medical facilities are cheaper in India compared to USA, the salary even when adjusted against the cost of living is not better than USA.
Of course, one can argue that in USA, one needs two cars, car insurance for each of these cars, medical insurance for the entire family, mortgage for a five bedroom independent house, private school for children and thus the savings would be negligible. In IISc, one can live like me staying in the quarters, not owning a vehicle, use the health center for medicines and live "with ordinary decency with an ascetic spirit" as envisaged by JRD Tata. In this case, even my current salary is too high. But then one is comparing different qualities and ways of life.
Regarding the other point of a central system for advertising, the national knowledge commission in conjunction with IISc is working on developing a portal on the lines of academia.edu and the chronicle of higher education. I am notionally taking care of its implementation. In this, we are planning to ensure that all conferences, job openings in academia in India, profiles of various researchers will be included. However, I believe, this is just the first step.
The research facilities in many state universities are minimal: no lab space, no access to scientific journals, high teaching load (12-14 credits per semester) and administrative procedures which are arcane. For example, one needs three quotations from different companies to buy anything above Rs. 5000 in the project. Above a lakh, the item needs to be tendered publicly while in IISc, it can be procured under single quotation. Compare it against the purchase and administrative procedures in IITs/IISc. Despite this, several universities do commendable research and the list of the top universities in India based on publications and citations can be found here.
However, unless the research facilities, administrative procedures in universities are improved and made attractive and incentives are provided to perform, not many researchers trained in advanced countries will return to state universities.