Once that is done, then the ministry should stand back and watch as the institutions compete among themselves to get the best people. The ministry could let the competition begin at home, before it goes global. And this should include playing full tilt at poaching quality faculty from institutions within the country. It should be possible to imagine the institutes of technology at Kanpur and Kharagpur vying with each other to work out the best offer for a brilliant candidate in the country. The universities can do this among themselves because they are governed by their own acts. But the Centre continues to keep the IITs under its wing in these matters, and it is now time to shed this kind of overseeing and controlling mindset.
It would be really interesting to see the competition between IITs and IISc to retain their best faculty. Incentives can include chair positions, enhanced infrastructure and better/assured funding.