> Making private sector/startup consultancy really easy for professors to do is one of the main reasons there is an insane pickup of pace in the return of the diaspora

Yep! The University of Waterloo back in Ontario did the same thing in the 1960s, which helped catapult the program into a Tier 1 CSE program comparable to older more established programs like UToronto and UMich.

> Lot of the startups (even YC ones!) by IIT students actually involved one of their professors in the ideation stage, and they even have equity % sometimes

Yep! There are also some NIT, BITS Pilani, IIT, and other program specific networks made by their alumnis in academia and VC. I think Foundation Capital (Netflix, Cerebras, Fortanix) is running one such program.

> It is true that the govt institutions themselves have less IIT representation, mostly due to low salaries

Ministry affiliated universities are a major reason why. For example, ISRO overwhelmingly recruits from IIST, ONGC from IIPE, and other SOEs or R&D programs will recruit from universities specialized in that specific disciple instead of an IIT or NIT now.