The government could step in and enforce licensing but that would engender its own corruption and retard the growth of private IT education. A softer approach would be to give recognition and ratings to institutions that fulfil some basic parameters. Solvency could be one criterion. If students are made aware through newspaper and TV campaigns that it is in their best interest to enroll with recognised or government-rated IT institutes, then scams like Wintech and Zap would be difficult to repeat. The UK tourism department does a rating of hotels that hotel owners in self-interest hang outside their establishments.
Tourists decide or decline to patronise a hotel on the basis of that rating card.
The same could be done with IT institutes. No, let the students be judge of these institutes. Recognise them without red tape or corruption. The writer, R.K.Narayan, was a nominated member of the Rajya Sabha some years ago.