Education has direct as well as indirect linkage with the growth activity of a country. It stimulates income by empowering people to enhance and utilize their capabilities more appropriately. The system of education in India has made rapid strides as evidenced from the exponential rise in the number of students and institutions, offering diverse courses. It is also being observed that the Indian education industry is subjected to Increasing Returns to the Scale, connecting higher returns with higher degrees. The education sector of the country is confronted with multiplicity of problems that are making it skewed and less productive. The resource inadequacy, government's indifference, rural – urban divergences, gender gap and internal mismanagement are some of the serious issues to be focused upon. If we are in a position to overcome these problematic areas, then our human capital base which is crucial to complement and supplement physical and natural resources of the country will be certainly strengthened. The government policy measures are ambitiously attempting to nurture some selected institutions from public and private sector to the world class status. But it needs to be ensured that the benefits of the education policy reach at the bottoms of the pyramid also.