PMO and HRD go head-to-head over IIM Bill


During the year 2014, when Narendra Modi was on his campaign trail, one of his key promises was that an IIM and an IIT should be established in every state. Yet, after two years after coming into the power, human resource development ministry is pressing for a new IIM bill which, in its current form, will severely damage IIMs, turn them into handmaidens of sarkari babus and destroy the global brand name they have built so assiduously. The stated purpose of the draft Indian Institute of Management Bill 2015, released for public consultation, is to strengthen IIMs, declare them institutes of national importance and allow them to grant MBA and Ph.D degrees – as opposed to the postgraduate diplomas and fellowships they currently offer.

However, the Prime Minister’s Office (PMO) and the HRD Ministry don’t seem to agree on the degree of autonomy that should be granted to the Indian Institutes of Management (IIMs). The changes suggested by the PMO are:

  • The Bill states that the President, in his capacity as the ‘Visitor’ of all the IIMs, can review the work of any IIM. PMO thinks this should only be done on the recommendation of the Board of Governors (BoG) of the institute.
  • The Bill provides for three alumni members on the BoG of each IIM. PMO has suggested five.
  • The Bill says the BoG will have two nominees of the central government. PMO has recommended one nominee.
  • The draft law provides for BoG to have four eminent persons, of which at least one shall be a woman. PMO wants at least three women members on the BoG.
  • The proposed law says the member-secretary of the coordination forum (coordinating body) of the IIMs should be an officer not below the rank of joint secretary. PMO has suggested an IIM director should be the member-secretary.
  • According to the Bill, the IIMs will have to intimate the government about any changes in the tuition fee. PMO has said the institute does not need to inform the government.

The HRD Ministry has agreed to incorporate the last three suggestions. However, it is not in favour of altering the provision on an inquiry by the President into the working of an IIM on the ground that the IITs are also governed by a similar clause of the IIT Act.

When PM Modi, every alternate day is emphasizing over Make in India, his own HRD ministry is trying to make it difficult to run India’s best business schools. It is baffling why instead of sorting out the mess that is India’s education system; the government is trying to fix the part of it that actually works. The present need of the Indian economy is the quality managers. If in any case the bill got passed, it will not only hurt India’s talented youth who aspire for high-quality education within the country but also damage, the PM’s own Make in India programme.

As per the latest reports, after much debates and arguments between the HRD ministry and the PMO, the IIM bill has finally reached the Cabinet for approval. It will be tabled in the monsoon session of Parliament and is likely to go to either a select or standing committee. As per the sources, the ministry had its way on two of the four contentious issues.

  • For President to be the visitor of IIMs with power to review their functioning, just as it is in the case of IITs. The ministry argued that a similar provision in case of IITs has worked well. Eventually, the ministry was able to convince the PMO.
  • For making the HRD minister, the ex-officio head of the committee of IIMs. The ministry again gave the instance of the IIT Council, which is headed by the HRD minister but has not come in the way of autonomy of IITs.
  • Regarding the issue of composition of IIM boards, the ministry had to give in. The PMO had suggested that the board should have five of the 14 members from among alumni. The ministry wanted only three. But since the PMO argued that non-government voice should be there on the board, the ministry agreed for five alumni.
  • The ministry also abides with the PMO’s suggestion that IIMs need not come to government for any change in regulation. Board of governors should have the final say in approving regulations.

A concern for IIMs: if the bill is passed in the current format, will there will be any revolt or not in the IIM system?

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