For over a decade, they have been stagnant at 0.8% of its gross domestic product (GDP) despite oft-repeated announcements to hike it to 2%.

It depends. I feel that in Social Science there have been over the decades scientists who came from India. Not only some who became famouse when working overseas (Amartya Sen or Arjun Appadurai), but also many who remained in INdia (C.T. Kurien, T. K. Oommen, Rajni Kothari, Arun Agrawal, Subrata K. Mitra, and many, many more). I can say little about natural science research, but I also have the impression that Indian scientists do relatively good in agricultural science, engineering, etc..... However, there is surely also justification to highlight that government contributions can help to increase research success.....