In India, the challenge of building 50,000 colleges

"There is a very thin layer of excellence at the top where you have the IITs," says Ben Wildavsky, senior scholar at the Ewing Marion Kauffman Foundation, which is based in Kansas City, Mo.

Until recently, new colleges wanting to offer degrees were required to be affiliated with a state- or central-government university. That's a heavy yoke because powerful – but stagnant – university regulatory boards control everything from curricula and exams to teachers' salaries.

Sharma's alma mater, the decade-old Indian School of Business (ISB), found the accreditation process so burdensome that the nonprofit school skipped it entirely. Ironically, the ISB is one of the few world-class institutions of higher education in India. No Indian school made this year's Times Higher Education ranking of the world's top 200 universities. But the ISB took No. 13 on a Financial Times list of global MBA programs. Yet it cannot grant MBA degrees – instead it awards certificates – as a penalty for its independence.

Some states, however, are starting to rework their rules to attract new schools. Ashoka will be private, unaffiliated, and able to confer degrees under a 2006 law in Haryana, a state bordering New Delhi. The state government acquired 2,000 acres on the edge of the capital; laid some pipes, wire, and asphalt; and carved it up for campuses.

Sharma was hired after the land was in hand. It's his job now to get all the government approvals to build and open the school. For all of the reforms, one constant remains: India's notorious bureaucratic web.

"Each day you deal with a government department it's frustrating," says Sharma.

Sharma's boss, Pramath Sinha, who also set up the ISB and a journalism institute, argues that Indian regulators have the system backward. "What [other] governments do the world over is they monitor the quality – they monitor the output," says Dr. Sinha. "So they don't make it difficult for you to enter the sector, but they do make it quite strict that whatever you provide is adequately rated."

Beyond bureaucracy, new schools face two competing shortages – land and instructors. India maintains fixed pay scales for faculty, which makes it hard to attract good professors. Salaries have increased dramatically over the past five years, says Vibha Puri Das, India's higher education secretary, though she admits the system is short 1 million teachers. Given such demand, teachers can be choosy about location.

"The dilemma is, yes, if you make a good university next to a metro you can attract students, faculty, corporates, but then the cost of land becomes a problem," says Jitin Chadha, director of the Indian School of Business & Finance, a private school in New Delhi linked with the University of London. Conversely, "I've seen private universities set up in the back-of-beyond that have everything but faculty."

His school, by contrast, remains a boutique, catering to just 150 students in one building on one acre of Delhi land.

Ashoka's backers hope they have the right location to surmount both problems: enough land to expand, but also a site close enough to Delhi, one hour away, that students and faculty will be willing to commute. The campus, now just a patch of dirt, lies along the fabled Grand Trunk Road that, in British colonial times, linked Calcutta to Kabul.

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