Higher Education (HE) in India had been accorded prime importance from the very beginning. However there has been rising demand for HE induced by liberalization, privatization, globalization and the need of skilled work force. In the light of increasing demand for higher education, the government has also taken up measures to ensure quality in the system while accommodating the increasing demand. It has been rightly said that quantity and quality of water in tap depends upon the quantity and quality of water in overhead tank. In spite of the hard work for the past few decades, we could hardly change the structure of higher education and it is said the sick child of government. Access, equity and quality problems continue to manifest our system of higher education. National association of software and service companies (NASSCOM) revealed that not more than 15% general graduate students and 25-30% technical graduates are employable. According to National University of Educational Planning and Administration (NUPEA) HE is vital importance to build knowledge based society of 21st century based on social, environmental and economic development. UGC has recognized only about 6000 of 36000 colleges and 167of 634 universities to receive developmental grant. UGC identified 10 universities and 100 colleges as institutions with potential for excellence. NAAC has accredited 149 universities and 3672 colleges so far rated 9% as A, 68% as B and 23% as C grade. Obviously, the current quality level is deplorable. This paper examines the strength, weakness, opportunities and threat facing HE in the country which lead to lots of expectation, challenges and requires urgent intervention due to magnitude of problem.