Rohan
This is one of my favorite topics and Matt makes great points. But, IMO there is not a right or wrong. Yes, SEOmoz has a great best practices page (see Matt's link) on this and when I look at it I always wonder as to its age or last update. (One of the reasons is that as the web expands, there are less and less .com/.net sites and it clearly says here that:
Top level domains (like .com) are the extensions associated with domain names. For best ranking results, avoid uncommon top-level domains (TLDs). Like hyphens, TLDs such as .info, .cc, .ws, and .name are spam indicators.
Here is why I question this: I do not believe that "spammy" can be quantified and I have yet to find a spammy test that was reliable. Also, I question what a spam indicator is and in the absence of any other relevant 'spam indicator' what affect it might have on ranking. Is it that Google has a spam indicator in the algorithm that absent any other evidence, devalues at some level a hyphen or a .info? I would love to see the proof.
Note: My incredulity is driven by results we achieve using hyphens as needed or .info as needed.
Today there are too many instances where hyphens are needed just to be able to figure out what it says. (Or to insure correct interpretation: expertsexchange.com is the classic in this group) Yes, if this is an EMD and if it is in a branded or common context someone who already knows of it might not use the hyphens.
But, if we are looking to capture those who are searching for something they don't yet know of, they are not typing in amityuniversity delhi with or without. They are searching for something like universities in Delhi, graphic design schools delhi, etc. They are not going to the SERPs and on finding what they want, going to the address bar and typing it in; they are clicking the link in the SERP and going to the page.
So, my rule is this: Use Hyphens to clarify a long or confusing domain/sub domain name. Use hyphens competitively if you desire an EMD where one is not available for a high impact page.
We are an agency and do a lot of sites that clients come to us with no domain name for. We use hyphens and non hyphens. I have yet to see where a hyphenated domain is negatively impacted to a level that gave me pause. I am sure based on experience that a hyphenated EMD does have more impact than a non hyphenated domain that is not exact match.
I look forward to a vigorous discussion on this oft discussed issue! 