Going by media reports, the government is now actively working on a major overhaul of the regulatory system in higher education . This reform has been long overdue and, after the passage of the landmark National Medical Commission Act, the natural next step.The current context for the reform is set by the draft National Education Policy (NEP). While NEP is to be applauded for its recommendation of full autonomy to higher education institutions (HEIs) in areas such as administration, teaching, research, curriculum setting and foreign collaboration, the regulatory and institutional structures it has proposed are much too complex and unwieldy to yield the desired outcome. The government will do well by considering a simpler, more flexible architecture suitable for the 21st century.A review of systems governing higher education in the United States , United Kingdom and China, which have been most successful in delivering quality education and research, suggests that the new system be designed to promote rather than regulate education. To make this intent explicit, the government must designate the successor institution to the University Grants Commission (UGC) the Higher Education Promotion Commission (HEPC). In turn, HEPC should be designed such that it cannot resurrect the Inspector Raj of the UGC regime. I provide, in my forthcoming book, additional details on the proposals that follow.The chairperson and members of HEPC should be selected from amongst the most eminent persons of unimpeachable integrity. They must come from diverse academic disciplines. The commission should be assisted by three bodies: (i) Advisory Council; (ii) Office of Registration of HEIs; and (iii) Committee for Quality Assessment. The Advisory Council should include as members scholars from different fields and representatives of the states. Its job would be to sensitise the commission to issues relevant to education in different fields and states.The Office of Registration would maintain the Register of HEIs. Guided by the commission, it would develop a classification that categorises HEIs into those that are fully autonomous, partially autonomous, degree granting, non-degree granting, private, public, foreign-owned and of national importance.The commission would formulate transparent criteria for entry of new HEIs of domestic as well as foreign origin into the register. It would take the decision to grant or deny entry to an HEI applicant in a time-bound manner. It would also formulate transparent criteria for the existing HEIs to maintain entry into the register. These criteria will be based principally on outcomes and not inputs. Enforcement would be entirely through a clear statement by each HEI on its website that it satisfies the criteria stipulated by HEPC. Any false claims would attract punitive action.Degree granting power would be vested in HEPC and implemented through the Office of Registration. The commission would develop transparent criteria under which an HEI is empowered to grant degrees. It will be free to confer such power on both universities and colleges allowing the more distinguished ones among the latter to develop their own brand names and even transform themselves into universities. The commission would also specify criteria under which an HEI will be granted power to authorise other HEIs to confer degrees on its behalf. This power would be available to both public and private universities.Furthermore, the commission would develop criteria that would qualify an HEI to use ‘university’ in its title. These criteria would offer paths to set up an institution directly as a university as well as to convert an existing HEI into a university.The Committee for Quality Assessment would develop criteria for rating different categories of institutions. With its help, the commission will identify and designate outside agencies to rate different categories of HEIs. It will be important to identify multiple agencies to carry out assessment so that they can rapidly cover all HEIs.HEIs with full autonomy will be entirely free to develop their own curriculums and choose textbooks and readings. HEIs with less than full autonomy would follow the curriculums and textbooks of one or more HEIs with full autonomy. They would be required to identify the source institutions of their curriculums on their websites.A separate, independent committee that is at arm’s length from the government would allocate government funds for education and facilities (but not research except that relating to pedagogy). The criteria for such disbursements would give considerable weight to the quality of institutions as assessed by agencies designated by the commission. The eventual goal should be to allow private and public HEIs to compete for these funds on equal footing based on the quality of education.Finally, it is critical to forge a path to ending the current separation between research at independent councils and teaching in HEIs. India needs to integrate the councils into HEIs and incentivise research at the latter in a major way via funding and reduced teaching.This requires the creation of a National Research and Innovation Foundation with a large sum of funds at its disposal. The foundation would offer project based research grants through a peer review process. It will have to pay particular attention to research in social sciences and arts and humanities, areas in which India has lost much ground to other countries, especially China, in the past two decades.The writer is Professor of Economics at Columbia University