It is rather obvious that there is a definite trend towards privatization of education in India. The Government in order to fulfill its obligation of providing free and compulsory Primary Education is investing more and more for the development of the Primary Education. A direct outcome of this has been the decrease in the investment in higher education by the Government. Private enterprises could be encouraged to start professional institutions but it must be ensured that the entry of private enterprises into the scene does not lead to privatization. The entry of Private enterprises would ease the burden of the State in providing higher education to its citizens. Regulatory arrangement must be put in place before the private sector is allowed to enter the educational sector. The State at the same time cannot absolve itself from the obligation of providing education to its citizens, a majority of whom cannot afford education in private professional institutions.