Why did Sanskrit decline in India ? What were the various reasons known, for the decline of this language ?
Sanskrit is not a dead language in the Western concept of a dead language. Sanskrit has not been a common spoken language for thousands of years. Even at the time of Buddha in 500 B.C., Sanskrit was no longer a common spoken language.
Nevertheless, the Vedas are in Sanskrit. The Vedas have survived as the world's oldest scriptures without any altercations for thousands and thousands of years because they have been handed down in the original Sanskrit. The Vedas were revealed to man in Sanskrit. Many important commentaries on the scriptures have been and continue to be written in Sanskrit.
Swami Vivekananda said that all the people of India could be raised spiritually and culturally by the study of Sanskrit and actively encouraged the study of Sanskrit by everyone. Brahmin pundits and scholarly Sadhus are still proficient in both written and spoken Sanskrit. I have met Sadhus whose commentaries on the scriptures are still done in Sanskrit. There are Sanskrit libraries of old commentaries that are still kept and studied in different maths.
Many orders of Sadhus require the study and knowledge of Sanskrit before sannyas is given.
Sanskrit's decline started from around the 11th century when vast parts of India came under Islamic rule. Persian and Arabic influenced Urdu became gradually language of governance after the establishment of Islamic rule. I have seen treaties between the British and the Indian rulers in the Victoria Memorial in English, Persian and Urdu.Then during British rule Sanskrit study (and Persian and Urdu) was basically proscribed and the study of English gained in importance. The reason given for the suppression of Sanskrit as a link language was that using such a language would encourage vile superstition while the English language as a link language was an incomparably better vehicle of progressive and scientific thought. After independence the nationalists acted further against Sanskrit by removing it as a compulsory subject. The Nehru government also stopped supporting traditional Hindu schools which also caused further damage to the study of Sanskrit.
Sanskrit was still used by some even as late as the 17th century. Some of the output of the Kerala school of astronomy and Mathematics (14th to 16th century) was in Sanskrit. The famous scholar Vijnanavikshu (probably around 16th century) also wrote his original works in Sanskrit. The famous 'Sarva Darsana Samgraha' by Madhavacharya written around 14th century was in Sanskrit. Vivekananda and Abhedananda wrote some of their works in Sanskrit in the late 19th and early 20th century. Nevertheless Sanskrit in its role as a link language was finished due to lack of political support.