The University Grants Commission (UGC) is a statutory body established in 1956 by the Central Government to harmonize, verify and preserve standards of the educational system in universities. The UGC is governed by The University Grants Commission Act enacted by the Union in 1956. The main object of the Act was to establish UGC and to endow with provisions for the management and retention of standards in the universities.

The Act empowers the Central Government to declare any institution relating to higher education as a university on the advice of the Commission and such institution shall have the status of a university under the Act. The University Grants Commission shall be constituted on notification published by the Union in the Gazette of the Government of India. The Commission shall have the status of a company with power to purchase, hold and set off assets, right to litigate and enter into contracts. The Central Government appoints a Chairman, who is not an officer under the Central or State Government, Vice Chairman and ten other members as the controlling authorities of the Commission. The other members are appointed as specified under the Act.

The Vice Chairman shall have the same rights and duties as that of the Chairman. The appointments shall be done after notification in the Gazette of India. The meetings of the Commission shall be held in accordance with regulations formulated under the Act. The Commission is empowered to appoint persons for assistance or guidance for the proper functioning of the Commission as per the procedure laid down under the regulation. The temporarily appointed person shall have the right to take part in the proceedings of the meeting but has no right to cast his vote. The Commission shall also employ a Secretary and other employees for its effective functioning with a fixed remuneration and conditions of service as stipulated by the Act.

The Act confers certain powers and entrusts certain duties to the Commission. The general duty of the Commission shall be to discuss with the universities and other entities for the endorsement and harmonization of education in universities and for the determination and upholding of standards of teaching. It shall be the duty of the Commission to conduct assessments and research, inquire the financial necessities, allocation of funds, provide grants to universities, constitute institutions for providing general amenities for universities, suggest procedures for improving university education etc. The Commission is entrusted with the duty under the Act to provide guidance to the Central and State Government regarding any question submitted to it. The Act prohibits the awarding of any grant to university which is not actually entitled to accept such grant.

The Commission shall set up a report of the accounts of the income and expenditures and the copy of the statement shall be forwarded to the Central Government. The Central Government is entrusted with duty to place the statement before the Parliament. The Commission shall retain a statement of accounts in the outline and method, in discussion with the Comptroller and Auditor General of India. The Commission shall be guided by the Central Government in matters connected therewith. Where a dispute arises between the Central Government and the UGC, the assessment of the Central Government shall be absolute.

The Act penalizes for the acts done by any person, association or group of individuals, in contravention of the provisions of the present legislation. The Act empowers the Central Government to formulate rules for implementing the objective enshrined under the Act. Likewise, the Commission is also entrusted with the task of forming regulations in conformity with the provisions of the enactment.

In exercise of the powers conferred on the Central Government, UGC Inspection of Universities Rules is framed in 1960. Other rules formulated by the Central Government include UGC (Fitness of Certain Universities for Grants) Rules, 1974. The UGC has also framed Recognition of College in Terms of Regulations, 1974; UGC (Establishment and Maintenance of Institutions) Regulations, 1985; UGC Regulations regarding the Minimum Standards of Instructions for the Grant of the First Degree, 1985 etc to implement the specifications under the Act. The present legislation has been amended by enacting University Grants Commission (Amendment) Act, 1972 and further in 1985.