At just 33 people per 100,000 of population in jail, India has one of the lowest incarceration rates. Just for comparison, the figures are 756, 629, and 119 for US, Russia and China respectively. Even the relatively crime-free Japan jails 63 people per 100,000 of its population. An interactive graphic of global prison population is available here.
How significant is this low incarceration rate, an indicator of the inability of our policing and criminal justice system to arrest and hold people accountable for their crimes, in explaining the high crime rates in India? This assumes importance in light of evidence, especially from the US with quarter of the world's prison population, that increases in prison population leads to reduction in crime.
Examining crime records in the US over the 1990-2001 period, Steve Levitt identifies four factors that explained the drop in crime during the nineties - increased incarceration, more police, the decline of crack and legalized abortion. He also finds that other oft-cited factors - the strong economy, changing demographics, innovative policing strategies, gun laws and increased use of capital punishment - appear to not have played an important role in the declines.
However, there are also studies that its impact is more modest and is increasingly subject to diminishing returns.