Higher education should be linked strongly to socio-economic development and investing in it will build up the Human capital essential for development. The University Grant Commission has fifteen (15) universities, three (3) campuses and sixteen (16) higher educational institutions under its purview. With a growing demand for university education access has to be increased and quality improved while maintaining equity. Constructing university buildings is not enough; the facilities should be there as well as qualified and experienced staff and undergraduate syllabi that cater to the job market. This cannot be done overnight. Annually 120,000 to 130,000 gets qualified to receive higher education, but our universities can only take 30,000. In 2009 out of all students who sat for advance level examination some 62% gets qualified to enter the universities although some 16% were admitted. The Government spends nearly 20 billion rupees per year on state universities and other higher education institutions. In 2010/11 the amount allocated has been increased to 23 billion rupees.
Most of the state universities depend on the funds given by university Grant commission. The Sri Lankan system of university education began in 1921 with the establishment of the university college, Which in 1942 was elevated to the status of fully fledge university, which at its inception accommodated only 904 students.. The impact of the free education scheme came to be felt in the 60s and 70s and the university system in response to those pressures, some of which were political in character, make certain adjustments where by the system underwent a change.. It was on the basis for Sri Lanka to established provincial universities to expand the opportunities for higher education. These universities are new, and their infrastructure not yet developed, even though the new system broke away from the mould of the conventional university. They introduced new courses which have been organised on the basis of the concept of employability. Our present policy strategy is to produce an employable competent graduate, who can find employment in whatever field he or she under takes to study.