I'm going to go against the grain here and say that, as someone who follows domestic cricket all around the world pretty closely, India's First Class setup seems almost perfect to me. There are two main 'styles' of First Class domestic structures around the world and India seems to have combined the best of both worlds; if there's to be a fall-guy for India's poor series, it should not be this.
The English domestic structure works on the principles of tradition, meaningful rivalry, volume of cricket and opportunity to all. There are heaps of county teams that all have history going back decades if not centuries and the teams are meaningful in a way that goes past merely beyond supplying the national team. They cram heaps of cricket into their season. The main advantages of this are young players getting lots of meaningful experience quickly, all potential Test players getting a run (national selectors aren't hamstrung by domestic selectors) and there's lots of opportunity for players to improve while playing legitimately meaningful First Class cricket. The downsides of it are the fact that the quality can be diluted by the number of the teams at times, quality can be lost and blend into the background of 'minnow-bashing' type domestic heroes and the two division system can make Division II performances somewhat irrelevant when it comes to Test aspirations. A gap in created between Test and domestic cricket that need not be there if there were fewer teams.
On the flip-side you have the Australian-like system, which South Africa and Zimbabwe have recently restructured themselves into, whereby there are fewer teams (around 6) and fewer matches overall. The advantages of this are of course the higher standard you get with it and the smaller class difference between it and Test cricket, as well as the higher intensity and pressure to perform that fewer matches creates as opposed to the daily grind - it almost simulates Test cricket pressure in a way. There are downsides to this too, though - firstly, in the case of South Africa and Zimbabwe, they've abandoned traditional cricketing provinces for this meaning the domestic competition now acts purely as a feeder competition for the national side with traditional passion and rivalry within the teams itself. It can also create a situation where the best players in the country are stuck playing grade cricket for whatever reason - balance, poor selection, uneven distribution and all sorts of things can become major issues when you have fewer teams. Australia is seeing this now with the spinner problem - there's only one spinner per Sheffield Shield team so when a few retirements happened at the same time they only had a couple to pick from and they had dreadful records. With more teams, the likes of Beer, McGain, Hauritz, Bailey, Lyon and O'Keefe who were killing grade cricket would've had a lot more First Class experience and would've developed their skill to a higher level earlier.
India, in many ways, have both. I love the structure for the most part. They have the Ranji Trophy which gives everyone from around the country plenty of experience in consistent, meaningful, professional cricket - everyone has opportunity to stand out and develop properly in a serious First Class structure against all the best players in the country. On top of that they also have the Duleep Trophy, which I know Arjun doesn't have a lot of time for, but this competition adds the benefits of the Australian-style system without the downsides - it's a high-quality, solvent competition involving the cream of the crop in some high intensity, high quality matches.
My only recommendation would be to extend the Duleep Trophy a little bit so it was a genuine round robin again, even if it meant cutting the Ranji Trophy down by a couple of weeks. This is the competition that should be really catching the eyes of the selectors and the Ranji Trophy, played earlier in the season, should be giving numerous players an opportunity to force their way into these zonal teams.
Of course, it'd definitely help if the national selectors actually paid more attention to these competitions in general, but I don't think there's much wrong with the system itself.