We have a 45 billion dollar defence budget (excluding pensions). Tell me which country with a defence budget similar to ours has more than 300 4th gen fighters? UK and France, which have the same amount of money to spend on their air forces, have only managed to have 160-200 fighters in their inventory.
By comparison, we have 272 MKI + 40 Mirage + 66 Mig 29 + 36 rafales incoming, which equals 414 4th gen fighters, and 83 Tejas are also incoming. For the amount of money available, IAF is in good shape. Fighters don't appear out of thin air when you need them. You need hard cash. That's why 126 Rafales for 12 billion USD was a pipe dream.
The Chinese air force itself only has 650 4th gen fighters now, despite having a far bigger budget than India's.
If pakis weren't getting F 16's at an extremely subsidized price (1/3rd of actual price), then they would barely have had 25-30 F 16's in their inventory.
We can talk about how many fighters are required till the cows come home, but how many we can get is purely dependent on money available. No use blaming Parrikar or military planning. We have a very large number of modern fighters for our budget. If we want a significantly bigger fleet of modern fighters, our defence budget needs to rise substantially, which is only possible with a much bigger economy.