Too many Indian universities have become "teaching shops and degree-giving authorities" at the expense of research, the country's Prime Minister has said.
In a wide-ranging and at times critical assessment of higher education, Manmohan Singh called for a return to the traditional strengths of higher education.
"We must revive the tradition of doing good research along with good teaching in our universities," he told an audience at the Shri Mata Vaishnodevi University at Katra.
"I say this as someone who has been a teacher ... I recall that in the days when I used to be a student and a teacher, universities placed great emphasis on doing research along with teaching.
"It is a matter of some concern that over the years many universities have become teaching shops and degree-giving authorities. We must reverse this trend."
It is not the first time Dr Singh has criticised higher education in India. Last year he revealed that two thirds of the country's universities were rated as poorly performing, bemoaned faltering enrolments and suggested that curricula did not match employers' needs.
Dr Singh said that the Government was committed to a "quantum leap" in higher education, which was "at the threshold of a new era".
During the eleventh Five Year Plan, covering the period 2007 to 2012, 30 new Central Universities would be established, he said, including one in every state and 15 that are "conceived as world-class institutions".
He pointed to the foundation of new national institutes of science, technology and information technology as further evidence of his ambition for the sector.
Highlighting public scholarship programmes, including some favouring students from poor backgrounds and lower castes, Dr Singh urged private institutions to do more.
"I believe that a more liberal funding of merit-cum-means scholarships is required in publicly funded institutions and, more importantly, in privately funded institutions," he said.
As more money is invested, Dr Singh urged universities to spend the extra capital wisely. "It is not enough to spend it on buildings and salaries alone. Some of it should be earmarked for research, and quality research at that, and for providing scholarships to promising students," he said.
He set out his aspirations for the influence that higher education can have, noting that terrorism remains a "grave threat to peace, stability and progress of the entire region".
He added: "A democratic society, a free and open society, can never be terrorised and made to fear the illiberal mind."