I have a serious problem with the idea that increase in salary and other monetery benefits will increase quality of any profession. Increase in salary and other monetary benefits will encourage many talents but will also attract many un-worthy candidates to that subject. If survival and progress of a person in that specific area is not dependent on actual productivity and accountability then any increase in monetary benefit will do more harm than good.
If you do not love a subject but join it simply because of money, then there is a very high chance that you will remain just mediocre. Your main strategy to prosper is to belong to groups of like minded mediocre people. Then wipe out any potential trouble makers- in form of genuine talent (outside the group) or a student who asks too many questions that remind you of your mediocrity. The only motivation for such people, in any profession, is money. It’s not very surprising that the main topic of discussion among faculties in majority of Indian universities and institutes is salary hike, pay commission, increase in TA-DA, HRA and so on. Very rarely you can hear any scientific discussion. This is not limited to science/research but almost any field of life there.
Check the quality of IT industry in India. Despite of being one of the most prosperous industries, innovation-invention is almost zero. Not a single core software (operating system, JAVA, C++, Oracle etc) is developed by these rich Indian IT organizations, using Indian IT professionals. We are happy to apply existing technology to solve customer specific problems. Why so? Now analyze who is joining IT and why? Any Tom-Dick-Harry can become an “IT professional” who have passed bachelors degree with some math (not always necessary). Few months of training will be sufficient to give him/her the job of an “IT professional” that will pay more than a teacher in a collage. On top of that, possibility of lucrative foreign tour/posting (again mainly for money) provokes many to join IT. Amdist this overwhelming majority, original talents in IT (both software and hardware) are lost. Many great talents in other field are also lost in this IT-mania.
You need to provide suitable environment to groom talented people. Money is needed but if money becomes the sole parameter to decide which profession to join, then all the professions and overall quality of life in that society get affected. The same is true for almost any profession in India, starting from IAS-IPS, to IIT, to IT, to Biotech. No amount of screening, no amount of stringency during entrance exams can prevent that. Indian bureaucracy is the worst in Asia (as per newspaper reports), our IT is only capable to do routine maintenance jobs, our IITs and Biotech industry/research is good for nothing other than imitating western research/product.
Many of these professions are well paid; many of these industries have good financial muscle but still lack originality, still lack efficiency and severely lack accountability towards the profession and towards the society.
I also think that there should be legally binding cap (on salary and other executive compensations) for all the top executives of big industries (say, with more than 1 billion USD turn over). I am sure that there will be no serious attrition of talents. Talented people will continue to enjoy their professions as before. Such cap will prevent the super greedy and many un-worthy people to chock the system there. It will also help distributing the money to other junior staff and will make their lives more at ease (reduce job loss and salary erosion, mainly during recession time like this).
Real talents, the dedicated ones join a profession they love. Money is important but must not be the main parameter, mainly in creative professions like research. I think, Creative ego, professional success and institutional power (fame) are the most important driving forces for such people. If someone joins a profession for money and the only day s/he looks forward to go to the office is the salary day then s/he should understand that there is a severe problem.