Your response is not entirely correct.

Lucknow university was not toe-to-toe with anything. But you are right, Allahabad university had people like Meghnad Saha and C. V. Raman working there at some point.

Also, Mulayam Singh did not come into power until the 1990s. The deterioration of universities all over India (not just UP and Bihar) started soon after Independence, with the nascent government looking for leapfrogs through the establishment of IITs, RECs and medical colleges, diverting money away from full-fledged universities. This policy has had some success, but the universities were left in shambles. India has still not done course-correction on that.