The relationship between the State and higher education institutions has changed over the years from a ‘controlling’ role to ‘steering from a distance’. However, what’s complicating matters in a massified higher education system is that public funding to universities has not kept pace with the rapid expansion. This has many implications for how universities are run and the emergence of private universities has changed the higher education landscape considerably. The most important concern is how to strike the right balance between autonomy and accountability. In recent moves the government has announced its intention to reform the higher education regulator, University Grants Commission (UGC), to give more autonomy to quality higher educational institutions. ‘Good quality institutions’ of higher education will be granted ‘greater administrative and academic autonomy based on accreditation and ranking’. The most recent regulation on graded autonomy means that better performing institutions will enjoy more autonomy. This clearly points to the fact that autonomy is to be seen as something to be earned and not just handed out to universities. Thus, we need to clearly understand the relationships between Government and universities, within university and between university and colleges. The chapter discusses these in the light of a completed CPRHE study on Governance and Management in four states covering eight higher educational institutions. While there have been moves towards granting substantive autonomy to educational institutions, it is often lacking in the case of procedural autonomy. The decentralized culture lies at the core of autonomy. However, universities are reluctant to pass on autonomy to individual departments. There are also differences between Central and State universities. This chapter thus attempts to understand the importance of issues of governance in higher education institutions in the current globalized economy and assess the implications of new measures that are taking place.