What is the row over the New IIM Bill

What is the IIM Bill controversy all about? Firstly what are the IIMs? We all know that the IIMs are the prestigious Indian institutes of management and higher learning in our country. The older institutes were initially formed by the government and were funded by it for 30 odd years. Now these and the 10 new institutes established thereafter all receive government grants.

Recently, the Ministry of Human Resource and Development (MHRD) wanted to change the governance of these institutes in a bid to ensure higher quality of education and to convert them as per global standards.

With the enactment of the new law if passed by both Houses of Parliament, the IIMs would have stood to lose a considerable degree of their autonomous functioning, which obviously would have affected their functioning and performance.

We all understand that self governance is the best way for a college or institute to pursue its goals. However, institutions that are funded on public money still need to be controlled by the government to a degree in order to fulfill their necessary social goals. There has to be a balance between freedom and accountability. Reviews from time to time, accreditation and annual audits can be conducted, but to try and control it’s very functioning cannot be fruitful.

The IIM bill initially proposed that a “principal executive body” of each IIM be directly under the control of the President of India, who would be a visitor. Of the 15 members of this board of governors, the government would nominate seven.

The most powerful person of the board, the chair person would also be appointed by the Centre. The chairperson would nominate two faculty members and so on.

IIM BillWould it be even possible for these seven board members (almost 50 per cent of the board size) to act independently of the government? No wonder IIM was up in arms against the passing of the bill. Freedom to act independently would have flown out of the window.

Why should the government appoint the director? The correct thing to do would be to allow the board, to hire the right person as the director through robust search and selection process. One should not be appointed as director because of his/her ‘luck and networking’.

Appointment by the government would only lead to corruption and politicization in appointments. The government needs to stay away from the process of searching for and selection of the director. Similarly, the faculty should be elected through a democratic and valid process.

The bill also aimed to bring under government approval other things like admission of students to various courses of study, the number of posts, emoluments and the duties and conditions of service of the academic and non-academic staff and much more. In short the government wanted to manage even the smallest details and have greater control of the functioning of the institutes.

The other effects of this would have been that there would be the same uniform pattern of governance for all the IIMs leading to lack of healthy competition, diversity and innovation.

IIM Ahmedabad director Ashish Nanda openly voiced his concern and criticized the impending bill.

“My view, and of most people at IIMA, (is that) government can be the ‘wise overseer’ of an institution from a distance. They should look into how education institutions are doing. If they are doing well then support them. If not then question them. From a distance, government should oversee how we are doing,” he said.

“….But micro-management is never good. If that is done, people working in institutions may feel less empowered. If government uses the bill to encourage the institutions to learn from each other and share knowledge then it is good news,” the director added.

“To be globally excellent, you need to have a certain amount of autonomy-you need to have certain resources, support of the government and leadership.”

“The draft bill proposes control of government in almost every matter, such as selection of chairman of board of Governors, fee structure, expenses, etc. They have covered almost everything from strategic to operational decisions,” said Nanda.

His views were also endorsed by Chairman of IIM-A Board of Governors, A M Naik.

“As per the provisions of the Bill, we need to take prior permission of government in matters related to admissions, courses, fee structure, establishment or maintenance of new building and regulating powers of academic council,” he said.

“Further, we will be required to take government’s permission if we want to form a new department in the interest of institution, as if expertise for this is available elsewhere rather than with the institute. Thus, nothing much is left for us. It is like operating here but the control is somewhere else,” Naik who is also the Executive Chairman of engineering and construction giant Larsen and Tubro said.

“PM wishes to have at least 25 world class institutions. But, this kind of regulation will only take us in an opposite direction. We expected more freedom. But, the bill, in its current form, will take away lots of freedom of the institutions and they won’t be autonomous,” he said.

“Our main contention is autonomy and over-regulation. We told the Ministry that such regulations will affect our efforts in building a world class institution. If this Bill is implemented, none of the IIMs will be in the top-500 list of world’s best institutions, forget about getting space into top-100,” added Naik.

Besides IIM-A, directors of Kolkata, Lucknow, Bangalore, Kozhikode and Indore opposed the bill while chiefs of some of the new IIMs supported it.

Coming out in support of the bill, Director of IIM Rohtak P Rameshan dismissed suggestions about the prestigious institutes losing their autonomy and contended that “some element of public discipline” is needed as “inefficiency” had crept in. “IIMs are public institutions where the government should have a fair degree of say in the overall interest of all,” he said, adding “some element of public discipline is needed as there is a lot of inefficiency happening in IIMs”.

Supporting the bill, the director of another new IIM trashed fears about autonomy of the IIMs getting compromised. “The government is well aware that if anything goes wrong today, it will create a hype in media, which will not augur well for it. So it will be cautious in any step it takes keeping the overall interests of IIMs in mind,” he said.

Meanwhile, the HRD ministry maintained that the objective of the bill was to allow IIMs to give degrees instead of post-graduate diploma in management (PGDM) as is the case now.

Though the diplomas given by older IIMs like IIM-Ahmedabad, Calcutta, Bangalore and Lucknow are well recognized in India and abroad, the degree-granting power will allow newer IIMs a level-playing field in terms of their courses and certificates issued there on.

There followed many round of talks between ministers of HRD and chairpersons and directors of the 19 IIMs of the country to iron out the differences. There was a also a nationwide debate over the government’s move and both IIMs and industry criticized the ministry for its backdoor entry in the decision-making process of the IIMs, making a divide between PMO and HRD over this bill.

Finally, following an intervention by the Prime Minister’s Office, the HRD ministry diluted the controversial bill significantly. Most of the disputed issues have been worked out. It has been decided that the composition of IIM boards, selection of board chairmen and course fees will be decided by the IIMs with little say from the ministry.

Eventually, the human resource development (HRD) ministry on Tuesday won the support of all Indian Institutes of Management (IIM) for the controversial IIM bill and persuaded them to enrol more students from the coming academic year.

Officials who spoke on condition of anonymity said the IIMs may have to raise intake by 30-60 seats per year for the next five years.

It is learnt that the proposed bill includes provisions for reservation of students from SC, ST and OBC category, it is learnt.

The human resource development (HRD) ministry will make one final attempt to persuade some of the older IIMs to be part of the government’s initiative to create 20 world-class institutions in India.

The bill will soon be put before the Cabinet.

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