In the Vedic age, Saunskrut was a spoken language. After scripts were invented, it was discovered that language changed with time. Horrified by the discovery, attempts were made to fix the language. Around 500 BCE Panini wrote a grammar for Saunskrut. It is the shortest, unambiguous grammar, a grammar followed by computer languages nearly 2500 years after him. His monumental work Ashtadhyayi, freezed Saunskrut in time. This is the Classical Saunskrut.

The spoken language kept on evolving, deviating more and more from classical Saunskrut. By the time of Buddha, local versions of Saunskrut called Prakrut (Magadhi, Pali, Sourseni) languages were in use. The latter literary works like some Puraanas were written in these Prakrut languages. Buddha’s teachings were propagated in the Prakrut languages. Buddha himself probably spoke Magadhi.
Later casteism prevented the lower classes from learning Saunskrut. Saunskrut was no longer the language of the common man. Still later, after the Islamic invasions, the royal patronage for Saunskrut stopped. Veda and Saunskrut teaching universities were destroyed. Saunskrut language was used only for religious purposes and few odd scholars who found it fascinating. Though Saunskrut is no longer a mother tongue, thousands of people are Saunskrut literate. There are several times more documents preserved in Saunskrut than in Latin and Greek combined. Saunskrut still enjoys the status of religious language.
The Prakrut languages were used throughout India for nearly fifteen centuries. Modern languages received the status of official language by 12th century AD. Marathi received the status of official language in the 12th century, during the Yadav rule. Kannada and Telugu derived from Tamil, Prakrut and Saunskrut received the status of court language in Krishnadev Raya's reign. Malayalam derived from Tamil, became a distinct language somewhere around the 9th century.
Tamil is a very ancient language, probably as old as Saunskrut. It is believed that Saunskrut and Tamil had a common source. All modern Indian languages share common words, and grammar structures, including the retroflex alphabets (the hard Ta, Tha, La , Na etc. A feature not inherited by the European languages.)

Influence of Saunskrut outside India

The European languages (Greek, Latin, French, German, English, Russian etc.) are derived from Saunskrut (or proto-Saunskrut?) The languages of the Middle East (Persian, Pushtu, Kurdish) have words and structures similar to Saunskrut. Avestan, the classical language of Zoroastrianism is almost identical to Vedic Saunskrut.
Saunskrut has influenced the languages of the Far East as well. Sinhalese was derived from Prakrut (Pali) language. According to a legend, Prince Viajaya of Bengal carried Prakrut to SriLanka @500 BC. Chinese has many words derived from or transliterated from Saunskrut. The Philippines language has loan words from Saunskrut that were traded by Hindu seafarers. The Malayan language has words derived from Saunskrut like: Bhoomiputra. The Indonesian language is called 'Bahasha Indonesia' (derived from bhasha). The Indonesian Airways is named Garuda (meaning Eagle in Saunskrut and Indonesian.). Thailand has places named like Aranyaprathet (Aranyapradesh). City names like Singapore and Kuala Lumpur have Saunskrut roots. The name Burma is derived from its Saunskrut name Bramhadesh.

Scripts:

The earliest known script is the Braahmi. Later Kharoshti and Devanagari scripts developed from Braahmi script. Today Saunskrut, Hindi, and Marathi use the Devanagari script. Gujarati, Bengali, Assamese, Oriya, Telugu, Kannada and Malayalam scripts have a one-to-one correspondence with Devanagari. Though Saunskrut is usually written in Devanagari script, Saunskrut works have been written using other scripts as well.

Devanagari script is the source for Burmese, Thai and Cambodian alphabets. The Javanese Kawi script has been developed from the Pallava script.

The Future

Languages become simpler with time. A language acquires new words as science advances. But it only adds to the vocabulary, not to complexity. It is predicted that, local languages will disappear, as some major languages become standards.
The languages that do not adapt to the new technologies will go out of use. Malayalam script was reformed in 1981 for better adapting to keyboards. Reforms might be required for other languages too!
In India, technical education is imparted in English. No Indian language adapted itself like Japanese or German or Chinese to create new words for scientific / technical discoveries. Thus almost every high-educated person thinks in English, rather than his mother-tongue. Does this ring any warning bells? Will the new generations respond to this?

Saunskrut roots of Tamil words

Saunskrut word	Tamil Word
sangam	sangam (meeting)
faLam	fazam (fruit)
pushpa	pushpam (flora)

Tamil roots of Saunskrut words

Tamil word	Saunskrut Word
kunTu	kunDa (lake)
kuntal	kuntal
baL	baL (strength)
panD	panDit
singa	simha (lion)

Languages spoken in India

Languages spoken in India also include Munda languages and a few Sino-Tibetian languages. Around 850 languages are in daily use. 15 languages are National / Official languages: Assamese, Bengali, Gujarati, Hindi, Kannada, Kashmiri, Malayalam, Marathi, Oriya, Punjabi, Saunskrut, Sindhi, Tamil, Telugu, Urdu, and English (associate official language).

Northern India	Hindi, Punjabi, Haryanvi, Kashmiri, Awadhi, Braj Bhasha, Gadhavali, Ladakhi, Urdu, Nepali
Eastern India	Assamese, Manipuri, Sikkimese, Naga , Nepali, Tibetan, Bodo
Central India	Bengali, Oriya, Awadhi, Bhojpuri, Chhattisgarhi, Hindi, Magadhi, Maithili, Bundeli.
Western India	Gujarati, Marathi, Mewari, Hindi, Marwari, Ahirani, Khandesi, Konkani, Gujari, Kachchi, Koli, Saurashtri, Sindhi, Bareli, Gondi, Vadari, Malwi, Sindhi
Southern India	Tamil, Telugu, Kannada, Malayalam, Tulu, Yerukula, Konkani, Kodagu, Badaga, Irula