This report presents a comprehensive set of guidelines approved by the Distance Education Council (India) in July 1997 for funding open universities and correspondence course institutes and describes policies and programs to promote distance education through communication, industrial, and academic networks. The first section, which summarizes the recommendations, lists guiding principles for support of state open universities and correspondence course institutes, as well as similar guidelines for institutional and academic reforms, staff development, student support services, and computerization. Other sections of the report discuss major considerations and guidelines for the nurturing phase of distance education and outline future development plans and funding for state open universities and correspondence course initiatives. The discussion in these sections touches on guiding principles, academic and institutional reforms, infrastructure development, curriculum development, student services, staff development, technology support systems, performance review and assessment, and research and development. A final section discusses the relationship of the Distance Education Council vis-a-vis open universities and distance education institutions. Appended are copies of the Distance Education Council proposals for establishing state open universities and its action plan for upgrading correspondence courses to distance education. (SM)