In Pune, we were positively encouraged to compose verses in Sanskrit.  My highschool Sanskrit teacher, Pandit N. N. Bhide, routinely asked us to translate from Marathi into Sanskrit verse.  The Tilak Maharashtra Vidyapith used to hold various annual competitions on the occasion of Vyāsapūjā including story-telling, verse-composition, quick memorization, Sanskrit debate etc.  So, composing verses in Sanskrit was encouraged in Pune, not only in the more traditional institutions, but also in modern institutions like the S. P. College and Fergusson College.  Several of our teachers used to compose poems in Sanskrit and publish them in the local Sanskrit journals like Śāradā and Bhāratavāṇī, and also in the annual magazines of Fergusson College etc.  I am describing my historical experience, but some of these activities are continuing into modern times as well.

Madhav