The problem of getting the Teacher : Student ratio right in institutes in India has been getting a lot of attention. I think the problem partly stems from a misunderstanding we've allowed to persist: which is that one necessarily needs to have a PhD in order to be able to teach undergraduate courses. I don't think this is true at all. Being granted a Masters degree in a certain discipline should mean that one has attained a certain level of Mastery in the subject. And if that is true I don't see why some of the better Masters degree holders wouldn't be able to teach an undergraduate course or two.
In fact there used to be an option in IITs whereby a deserving Masters degree holder could join as a lecturer and pursue a PhD alongside. I emphasize "deserving" because quality can certainly not be compromised.
I think we need to look at bringing that option back, say as five year contractual lectureships during which time one teaches one undergraduate course a semester alongside pursuing their dissertation research. By all means we test / interview people rigorously before offering a lectureship. Additionally we can require that the lecturer clear his PhD coursework with a sufficiently high grade point average / marks percentage and the PhD qualifiers first. This can serve as an additional quality check. But if someone is good enough why lose out by putting a constraint on ourselves that we wont absorb someone as a teacher unless he or she has a PhD?
This also has advantages from the lecturers' point of view. For one they would earn a salary higher than the stipend they would get otherwise. Secondly, a lot of learning and deeper understanding happens when one teaches. This would be invaluable in terms of contributing to the intellectual growth that is expected during one's PhD.
I think everyone: administrators, faculty members and students need to sort this misunderstanding out and start thinking along the lines of what benchmarks ought to be in place to be able to absorb lecturers and start making the teacher : student ratios in our institutes better.