Had another interaction with a former PARA SF personnel whom I had mentioned earlier.
Some interesting observations that I think are OK to share.
Regarding 3 months probation:He said that it was enough. He says it is not as if the volunteer goes for 3 months probation and the training gets any less afterwards. Even after the 3 months, the physical training remains of the same level for the rest of the time he spends in SF. The volunteer knows it. So, if he feels that he will not be able to endure this for years, he will quit himself (there are such cases). And even if the volunteer somehow clears the probation but it is felt that he is not able to keep his fitness..say after 8 months..he will be sent back his parent regiment. But this rarely happens as the guy who is able to endure the probation for 3 months generally gets into the rhythm and acquires the fitness to carry on. So, there is lowering of standards on that count. PARA units do not compromise on that.
Regarding conversion of PARA to PARA SF without Govt sanctionHe says this is impossible. This is army and everything (specially this big) has to be done according to the procedure and through the proper channels. He says that it is very likely that the rest of PARA battalions will also be converted to SF but it is impossible that it will be done without proper approval.
Regarding lowering of standards when converting PARA to PARA SF:He says that is not the case. He says that there is no difference b/n the physical fitness of PARA and PARA SF. There is a small difference of course. Some courses are not available to PARA (I think he mentioned Combat diving as one such course, but I am not 100% sure). Also, there is a small difference in equipment. But in his opinion, this is a very good decision. He says that some SF personnel feel superior to non SF and may say that there is a difference, but it is not the case (
note that the person is from SF himself).
More regarding selection procedure and training:He says that the volunteer cannot volunteer for a particular unit. He cannot even volunteer for SF. He can only volunteer for Parachute Regiment. Then he is given to any para unit depending upon the vacancies. Of course, a chap who has cleared the probation for say..5 PARA, may chose to convert to 1 PARA SF and again go for probation there. But this is rarely done. In fact, this is even looked down upon because of unit loyalty.
Also, regarding free fall jumps like HALO and HAHO. He says that paratroopers from both SF and non SF units can go through them. He says that there are various courses available and the personnel keep on doing different courses for a long time. This is generally done according to one's specialty. Like a person who is natural with demolition will first do courses related to it before going for others.
Regarding SFF and SGHe says that the PARA SF does not have any particular respect for SFF. It is not that they are not good, but it is not enough to impress PARA. Regarding SG, he says that he knows very little regarding the operations of SFF & SG so he cannot comment about that but he told me that the majority of SG come from PARA SF. And it is not as if some radical training is imparted to them there. In fact, he says that no CO likes parting from good men (let alone the best). He says that the men sent to NSG SAG and SG are generally done because of compulsion. He says that going to SG is like just another posting (
even though he was using the word "posting", he was almost making it sound as if it was a holiday 
).
I know that most of the above is totally contradictory to the general perception. So, I request Surya not to go postal over me.
I am merely posting what the guy told me. Obviously, I have no open source to confirm all this so take it FWIW.
PS: Misc stuff. The person says that the environment and culture of PARA is totally different from the rest of the army. For one, the people are much more close to each other. Eg: When any para (current, former or retired) sees another person wearing Maroon beret he always goes and introduces himself. In fact, it is considered extremely rude not to do so. It does not have to be long lengthy discussion, but a brief introduction is very important.
Also, once a person is from PARA, he is welcomed there even after retirement (
this is true for the regular army as well, but it is totally on a different level for PARACUTE regiment.) They is more like a family. Eg: It has sometimes happened that a retired officer has sent his son to his parent PARA unit during the child's school holidays..just for the purpose of making him fit and disciplined!!!
Added Later:
Surya,
Regarding 21 PARA SF, he again repeated that only the CO and a young officer were able to clear the probation. Apart from them, there was only the unfortunate 2IC who had volunteered. He said that no one from the rest of the MLI unit had volunteered. They had given a choice to do so but they had declined.
However, it is worth noting that the person telling me all this was not from 21 SF.
.....you really let your imagination run wild mate ....it's pretty obvious you have no idea what you are talking about or for that matter how the armed forces function
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…and is actually one of the Vikas units 
.....you really let your imagination run wild mate ....it's pretty obvious you have no idea what you are talking about or for that matter how the armed forces function
...
generally = BS
. Didn't know NSG had lady commandos.