According to Abi’s estimates, at about US$ 450 million per year, the “academic R&D support for the entire country of India is about the same as (or, even smaller than) the R&D expenditure in a (largish) US state university”. The abysmally low aggregate expenditure on R&D may well be cited as the reason to explain the “abysmally small number of scientific publications”.
The more bucks for more bang argument is true to a certain degree, and modern research requires high upfront investment. Yet the question that needs to be asked is not whether the government can allocate more funds for R&D (it probably can’t), but rather what is it doing to incent the private sector to invest in R&D work?
Staying on the topic of R&D, The Economist has a feature article on the rise and fall of corporate R&D in the United States.