The parliamentary standing committee on HRD, headed by Congress MP Oscar Fernandes slammed the government in a report.
It said the human resource development (HRD) ministry had not carried out adequate consultations with important stakeholders before drafting the Universities for Research and Innovation Bill, 2012.
Only Parliament or state legislatures can establish universities - even private ones - at present.
But under the innovation university bill, the 14 new varsities can be set up through memorandums of agreement (MoAs) - bringing them outside the scrutiny of all legislative authorities. They will also not have to adhere to key regulations binding on other universities.
The bodies sceptical of the bill have also raised concerns that creating different rules for the new breed of varsities may adversely affect the morale of current universities.