Abstract :Collection development is one of the primary functions of any library and information center. Collection Development policies allows library personnel's to develop proper collection based and provide value added services to users. For proper collection development there is a need for policies to be formulated considering the emerging trends in publication and in information management. Developing library collection of an academic institution is to fulfill the information needs and specific research of the institution's academic programmes. This paper deals with the concepts of collection development, electronic collection development, collection development policy and various challenges faced by the library professionals in the digital environment.