India is well known for its large pool of technical manpower, a fair proportion of which finds employment in developed countries, especially in the West. In order to sustain this trend, and to ensure that India does not throw away this key advantage, it is imperative that we continue to produce a critical mass of highly skilled manpower at an accelerated pace. An enabling academic and economic setting is a key factor determining the fate of our nation in the wake of the knowledge sector boom. This paper reviews the prevailing policy environment in this context to evaluate its efficacy in ensuring that India remains ahead of the curve in the knowledge sector which has been growing exponentially in recent years. We provide a brief description of some of the salient features of India's education system, especially in the context of higher education. As one is seeking to provide quality education, the process of accreditation as it exists in the country is assessed. Some indications of the level of public spending on higher education are also provided. A case is also made to highlight the need for promoting a knowledge-based economy. International experiences in managing the money that is engaged in funding higher education have been studied to derive lessons for India as a major constraint to private sector provisioning of higher education is the availability of adequate funds.