Market Research is Poor : IR needs strong consumer market research. which should be free from political clout.
And second is 'innovation in coaches'
Indian railways have similar coaches construction from inside irrespective classes : SL 3AC 2AC have more or less same design.
This hampers 'optimum' capacity utilisation
Third...
more... is 'fear of introducing' RailCar or RailBuses for shorter distances.
Where it is obvious that traffic is less, they need to deploy lesser coaches, or railcars and railbuses instead of queues of coaches
Fourth and last is : Chinese model of coaches is worth considering. Every coach is built such that it has multiple classes. And they can increase decrease the number of coaches at any given time depending upon the traffic rush or reduction.
But that needs 'independent' governing body, with single aim of efficiency.
IR is infested with so many 'protocols' that it hardly has breathe to think otherwise...