IIM Bill now awaits Rajya Sabha's approval to become an Act

Rajat updated on : 24 Aug 2017
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IIMs will soon be able to grant degrees instead of diplomas after passing of IIM Bill 2017. Get insights of IIM Bill here.

IIM Bill

Lok Sabha has passed the IIM Bill 2017 on Friday, July 28 and this bill has been welcomed by the directors of IIMs.  As per the bill, all the 20 IIMs will be given more autonomy and there will be less government interference. Earlier, the IIMs only had the power of issuing the diplomas to their students. However, with the passing of IIM Bill 2017, IIMs will now be able to grant degrees such as MBA and PhD, instead of PGDM and fellowships to their students. This bill has enhanced the power of IIMs, thereby giving them more liberty to function independently.

IIM Bill was presented in the Parliament on Friday by Mr. Prakash Javadekar, the Union Human Resource Development Minister, where he announced that the main purpose of this bill is focused on eliminating the government interventions from the IIMs, so that they can act independently. After the passing of this bill, IIMs will no longer be required to seek government approval for their functioning.

While interacting with some leading media houses, he said that “We should trust our institutions. It is difficult to run IIMs from here. These institutes should be given freedom as they have created such an excellent environment of higher education.”

He further added that, “It is a historical bill which will bring a new era in management education in the country.”

What is the take of IIM Directors on this bill?

The director of IIM Bangalore G Raghuram is happy with the passing of this bill. He said, “We hope that it will also get through the Rajay Sabha and become an act of Parliament.” He further added, “Apart from enabling us to give formal degrees, it will give us greater autonomy primarily because the appointment of a chairperson and the director can be the board level rather than having to be processed by the Ministry and the ACC.”

Director of IIM Calcutta, Mr. Saibal Chattopadhyay said, “The major beneficiaries will be our PGDM and FPM students who will be getting MBA degrees and PhDs which are globally recognized.”

Another IIM Director, Professor Ashish Nanda, said, “Once it becomes an Act, the IIM Bill will provide an opportunity to the premier national management schools to compete effectively with the world's best. IIM leaders must respond to the trust reposed in them by the public and the government and strive to excel even harder than before.

Rishikesha Krishnan, director of IIM Indore says, “It's a momentous step in the evolution of IIMs, I hope this can be enabling framework for other institutions as well.”

Facts you should know about IIM Bill 2017

-    After IIM Bill, all IIMs will become Institutes of National importance. They will have the power of granting degrees.

-    Currently President is the visitor of IIMs, which is proposed to be abolished after the passing of the bill.

-    The Board of these Institutes will have the power to appoint of remove their Director and Chairperson. The Director will be chosen on the basis of search – cum – selection panel. The duration of a Chairperson will be of 4 years and that of Director will be 5 years.

-   The Bill also provides the liberty of appointing the members of the board of governors (BoG) in each of the 20 IIMs through a transparent process.

-   Every Institute will have the board as the principal executive body.

-   Once IIM Bill gets an approval to be an act, the board will not need permission from MHRD to carry on its functions.

-   Auditor General of India and Comptroller will be responsible for auditing the accounts of IIMs.

-   After the bill becomes an act, an IIM Coordination Forum will be constituted. The central government will notify this forum and it will work as an advisory body, which will be headed by an eminent person.

-   According to the bill, IIM Forum will be given additional duties and powers like deciding the terms and conditions of the directors, while the board will appoint them.

-   As of now, there is no clear statement on the matter of reservation policy in concern with the IIMs teacher recruitment. It only states “enabling provision allowing reservation in employment.”

As mentioned in the Indian Institutes of Management Bill 2017,

“IIMs having grown into institutions of global repute, it was felt that they may be enabled to award degree to their students through an act of Parliament, which would declare them as institute of national importance.”

“The bill seeks to provide the 20 existing IIMs independent statutory status with uniform governance structure and policy framework, as also to declare them as institutes of National importance and to enable them to grant degrees to their students in the academic courses conducted by these institutes.”

“It is important to have central legislation in the larger interest of students.”

“While PGDM program was relatively unaffected by the absence of a formal degree, the Fellow Programme in Management which is equivalent to PhD, without the formal degree nomenclature, has not been able to attract enough students required to develop a strong research base in the country in the field of management education and also address the faculty shortage affecting the management institutions in the country.”

The Union Cabinet approved IIM bill in the month of January this year, which has now been passed by Lok Sabha and the bill will now be presented in Rajya Sabha for approval.  

In recent report, Director of IIM Bangalore has stated,
“We must acknowledge that there has been a lot of autonomy in terms of design and delivery of our curriculum, faculty recruitment, sourcing funds as well as generating revenues which has made IIMs what they are.”
 
According to him, “If the bill takes the shape of an Act, it will only allow Indian Institutes of Management to move into a shigher body of excellence.”
In words of IIM Ahmedabad Director, Ashish Nanda, 
 
“The Bill empowers IIM Boards, so they will be able to approve strategic plans, oversee execution, and reward performance.” He further added that these empowered boards will give motivation to IIM leaders so that they can build a strategy for implementation along with reduction in delays and other inflexibility which is related to the centralized decision making.
 
With greater accountability, comes requirement of greater accountability. Though, the auditing will be done by the Auditor General and Comptroller, still there are other things left to be checked such as all the expenses which may be incurred by these management institutes. There is another concern which may be challenging. This step can lead to several problems for the institutes offering PGDM courses. 
 
According to SS Mantha, if IIM starts giving MBA degree it will impose threats to other institutes which are offering PGDM as with this step, the brand value of PGDM course may decrease. 
 
“Apart from IIMs, several reputed B – schools are private entities which have been running autonomously since the beginning but offered a diploma as that was the norm which stands challenged with IIMs granting degrees thereby raising issues of PGDM – MBA equivalence.” He further stated. 
The other side, some experts feel that this shouldn’t be a big concern for the management institutes for high ranks. The VC of NMIMS University, Rajan Saxena says, “The PGDM had become a commodified entity with several institution offering it as it was in vogue and thus the ecosystem stands disrupted but reputed institutions seem unlikely to be affected by this move,” 
 
The big challenge lies in how to execute this plan of offering autonomy to these IIMs. Saxena says, “While the intent of this bill may lie in granting administrative freedom, real autonomy comes from the freedom to raise funds and regulate fees, among other things.” He further added in his statement, “There are several grey areas in the bill that are not clearly spelt out such as the freedom to draw an independent salary structure for faculty that is higher than what is being offered at other central universities or issues such as the recommendations of the seventh pay commission.”
IIM Bill 2017 is still waiting clearance from Rajya Sabha. Once the Bill becomes an ACT, IIMs will become independent organizations and will function on their own. 

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