“We know that Middle Indian (Middle Indo-Aryan) makes its appearance in epigraphy prior to Sanskrit: this is the great linguistic paradox of India.” In these words Louis Renou (1956: 84) referred to a problem in Sanskrit studies for which so far no satisfactory solution had been found. I will here propose that the perceived “paradox” derives from the lack of acknowledgement of certain parameters in the linguistic situation of Ancient India which were insufficiently appreciated in Renou's time, but which are at present open to systematic exploration with the help of by now well established sociolinguistic concepts, notably the concept of “diglossia”. Three issues will here be addressed in the light of references to ancient and classical Indian texts, Sanskrit and Sanskritic. A simple genetic model is indadequate, especially when the ‛linguistic area’ applies also to what can be reconstructed for earlier periods. The so-called Sanskrit “Hybrids” in the first millennium CE, including the Prakrits and Epics, are rather to be regarded as emerging “Ausbau” languages of Indo-Aryan with hardly any significant mutual “Abstand” before they will be succesfully “roofed,” in the second half of the first millennium CE, by “classical” Sanskrit.