As a spoken language and practical use, there is no doubt that Sanskrit is a dead language. This lives only as a symbolic religious language used for rituals on birth, marriage and death. I don't know whether any one can explain its more use in contemporary India. Something that is not used is called dead or extinct,howsoever you may love that.
However there is controversy. The fact of its use on ceremonial occasions, in rituals and declaration as official language in some states though not actually used in any official communication are considered as evidence of living language. Ut will be interesting to readfollowing extract from wikipedia:
"There are a number of sociolinguistic studiesof spoken Sanskrit which strongly suggest that oral use of modern Sanskrit is limited, having ceased development sometime in the past.
Sheldon Pollock argues that "most observers would agree that, in some crucial way, Sanskrit is dead". Pollock has further argued that, while Sanskrit continued to be used in literary cultures in India, it was never adapted to express the changing forms of subjectivity and sociality as embodied and conceptualised in the modern age.[18]:416 Instead, it was reduced to "reinscription and restatements" of ideas already explored, and any creativity was restricted to hymns and verses.[18]:398 A notable exception are the military references of Nīlakaṇṭha Caturdhara's 17th-century commentary on theMahābhārata.[50]
Pollock's characterisation has been contested by other authors like Hanneder and Hatcher, who point out that modern works continue to be produced in Sanskrit.[51]
On a more public level the statement that Sanskrit is a dead language is misleading, for Sanskrit is quite obviously not as dead as other dead languages and the fact that it is spoken, written and read will probably convince most people that it cannot be a dead language in the most common usage of the term. Pollock's notion of the "death of Sanskrit" remains in this unclear realm between academia and public opinion when he says that "most observers would agree that, in some crucial way, Sanskrit is dead."
Hanneder has also argued that modern works in Sanskrit are either ignored or their "modernity" contested.[53]
When the British imposed a Western-style education system in India in the nineteenth century, knowledge of Sanskrit and ancient literature continued to flourish as the study of Sanskrit changed from a more traditional style into a form of analytical and comparative scholarship mirroring that of Europe.