The best way to improve DRDO efficiency is to create a vibrant private defense industry.
India took a long time to learn from other countries successful models. If you look at every single Western Democracy that has a strong defense industry - US, UK, France, Germany, Sweden, Spain, Italy.......you will see the same model.
Except for Nuclear weapons and Space technology - almost all their defense technology(Aircraft, submarines, battleships, Tanks, Missiles, Avionics, Radars, armoured systems, satelites, etc) comes from private firms.
The only area that the government is directly involved is nuclear weapons & Space exploration, satellites. For that matter even Space and satellite technology in the US is developed by Private companies like Boeing, Lockheed, etc.
Given the amount of money that India is spending, the private players are sure to be interested. They are now starting to get involved.
The other aspect of getting private industry involved is that they will be able to pay more and get the best engineers to come and join the defense industry, and get rid of the mediocre performers which is nearly impossible to do in the government run enterprise. They will be much more efficient and result in lower cost and not as many delays as DRDO.
DRDO can then focus on the most critical stuff and farm out all the other defense projects to private firms.
For this to happen; India would probably need about 10 major private defense industry players backed up with big deep pocket money of the major industrial comglomerates like Tata, Birla, L&T, etc.