A brain drain to the US and the triumph of caste and dogma have ravaged my nation's universities, says Ramachandra Guha

After a visit to India in 1977, the British historian E. P. Thompson remarked that this was "not an important country, but perhaps the most important country for the future of the world. Here is a country that merits no one's condescension". In particular, he noted that every convergent influence of the world ran through Indian society: Hindu, Muslim, Christian, secular; Stalinist, liberal, Maoist, democratic socialist, Gandhian. "There is not a thought that is being thought in the West or East which is not active in some Indian mind."

Thompson's judgment did not seem hyperbolic at the time. Indian political parties subscribed to cohesive and well-articulated ideologies. Debates in the English-language media were rich, spanning a range of subjects from economics to education. And there was a large, sophisticated and self-confident community of intellectuals housed in universities and research institutes.

That ferment, however, is a thing of the past. Ironically, just as India's economic rise commands greater attention in the West, its intellectual life has entered into a steep decline. Many leading academics have emigrated, while a once robust and critical media has become increasingly superficial and wealth obsessed.

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The first universities in India were established in 1857, the same year as the great uprising known variously as the "Sepoy Mutiny" and the "First War of Indian Independence". The changes they unleashed were slow and incremental but forward-looking. They were among the first open and secular institutions that allowed high castes to mingle with low castes and men to study with women. The universities produced the generation of Indians who led the country's freedom struggle. They also nurtured a later generation who constructed the Indian nation-state. More than perhaps any other agent or institution, it was the university that fuelled both nationalism and democracy in India.

In colonial times, the universities were intended to focus on teaching, but after independence they also emerged as centres of research. At least in the social sciences, the work they did was of a very high quality.

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Economists tracked the processes of agrarian change and studied the impact of state planning; sociologists analysed the transformation of the caste system; political scientists explored voter behaviour in this new and very unlikely democracy. There was also an efflorescence of historical research on themes such as the economic consequences of British colonialism and the social composition of the national movement led by Mahatma Gandhi.

In retrospect, the 1970s and 1980s were perhaps the high point of intellectual life in India. At the time of Thompson's visit, at least in their departments of humanities and the social sciences, the best Indian universities were world-class. Leading scholars certainly had an international reputation - among them the sociologists Andre Beteille and M. N. Srinivas, the historians Irfan Habib and Romila Thapar, and the political scientists Rajni Kothari and Ashis Nandy.

The first signs of change were, however, abroad. Already, the best economists had begun leaving India for the West. Few now remember that much of Amartya Sen's finest work was done while he was at the Delhi School of Economics. He left India in 1971; so, just before or after him, did brilliant economists such as Jagdish Bhagwati and Pranab Bardhan. By the early 1990s, the numerous and rich Indian diaspora in the US began funding chairs and departments in South Asian studies.

Once, it was only Indian scientists who constituted the brain drain. Now, they were joined by hundreds of scholars in the humanities.

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To live and work in the US does not merely imply a physical separation, but also an intellectual one. Detached from Indian debates and Indian concerns, the diasporic scholars tend to publish in American journals on topics of interest to an American audience.

To be sure, the flight of intellectual capital is not the only reason for the decline of high-quality work in India. The universities, once the crucible of modernity, have become captive to caste and regional caucuses.

This is in part a capitulation of the Indian political class - no longer do political leaders speak of liberalism or socialism but of job quotas based on caste and religion.

Also contributing to the decline of standards is the vulgarisation of the Indian media, its altogether regrettable takeover by the cult of celebrity and glamour. The leader here is The Times of India , the bestselling English-language newspaper, that prides itself on not having a books page, with the space thus saved given over to the breathless celebration of a wedding between a British model and an Indian businessman.

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Thompson thought India the most important country in the world. I would say rather that it is the most interesting. Few countries are larger than India, only one more populous, none more diverse. That such a deeply divided and culturally heterogeneous country should seek to become a democratic nation makes the Indian experiment so much more intriguing and absorbing than any other. It is altogether a pity that this extraordinary experiment is no longer attracting the chroniclers it deserves.

Ramachandra Guha is an historian and biographer. His book India after Gandhi: The History of the World's Largest Democracy is published by Macmillan, Pounds 25.

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