The issues of diversity have become a ‘buzz button’ in all areas including political, legal, corporate and educational. In educational settings, diversity can enhance the intellectual and social development of stakeholders particularly students and faculties. Diversity is the individual differences of the people in demographic and psychological variables. The present study explores the perception of faculties and students about the functioning of Indian universities. Multi stage sampling method was used. The study includes three central universities in Delhi. 11 departments of these three central universities were taken with the sample size of 173 faculties and 312 students by proportionate sampling method. Structured questionnaire was used to assess the perception of faculties and students in the functioning of university. T-test and ANOVA were used in the study. The study corroborates with the findings that diversity influences the university functioning. The study clearly indicates that the faculties and the students perceived university functioning favorably. The institutions were working hard in fostering an inclusive environment. The study concludes that in creating a society where diversity of culture and thoughts will be accommodated and provide a democratic space for its expression and celebration.