Abstract: Starting in the early 1990s, there has been a rapid growth of private schooling in India. However, the implications of school privatisation for universal education (in terms of universal literacy) as well as gender gaps in literacy, corollaries of two of the key millennium development goals, MDGs), have not yet been examined. Using district-level panel data for the period 1992-2002, this paper aims to bridge this gap of the literature. While higher share of recognised private unaided schools boosts levels of literacy, other things equal, it is also associated with lower gender gap in literacy, especially at secondary levels. It is argued that the latter could be attributed to unobserved preferences of parents who choose to send both boys and girls to private schools at the secondary level.