Govt. Dilutes Draft RuIes Provision: IIMs Free To Decide Fee Structure

Following objections from the Indian Institutes of Management (IIMs), the Human Resource Development (HRD) Ministry is understood to have diluted the provision in the draft rules under the new IIM Act that was seen as an attempt to curtail the rights of the IIMs to decide the fee structure.

Earlier, the Ministry had circulated the draft rules among the 20 IIMs seeking feedback. Some of the older institutes had flagged a clause that mandated the Board of Governors (BoG) to “ensure that the fee charged from the students shall be commensurate with the overall expenditure for maintenance and expansion of the institute”.

The institutes had objected to the provision on the grounds that they were not receiving any funds from the government for maintenance and expenditure, the Indian Express reported quoting sources within the IIM community.

This provision has been modified to the extent that the IIMs will now be required to submit a three-year action plan, five-year strategic plan and a 15-year vision plan to the government, the newspaper said quoting sources.

In the revised draft, the clause says, “all institutes shall endeavour to ensure that concrete steps are taken by each institute to lower the cost of education and no deserving student is denied education in the Institute for want of funds.”

In the absence of any subsidy from the government, the IIMs charge between Rs 10 lakh to Rs 22 lakh. While IIM Ahmedabad has pegged the fee for the two-year postgraduate program (PGP) at Rs 22 lakh and for the 1-year PGPX at Rs 27 lakh IIM-Bangalore charges Rs 21 Lakh for the 2-year PGP and Rs 27.89 lakh for the 1-year EPGP programs. IIM Indore’s PGPM fee is Rs 13 lakh and the 1-year EPGP Rs 18 lakh.

Another provision that mandated the institutes to sign an annual Memorandum of Understanding (MoU) with the government on performance parameters, student intake, expansion of institute and output targets have also been scrapped. The IIMs had expressed apprehensions that the provision would lead to government interference in the working of the institutes that had been granted more autonomy under the IIM Act.

This provision has been modified to the extent that the IIMs will now be required to submit a three-year action plan, five-year strategic plan and a 15-year vision plan to the government, the newspaper said quoting sources.

The IIM Act, which came into effect on January 31, grants statutory powers to all 20 IIMs, including for the appointment of directors and chairpersons and Board members. With this law, the institutes can also award degrees, instead of diplomas, for their postgraduate programmes.

The rules, under the IIM Act, will define finer details such as the procedure for appointment and removal of an institute’s chairperson and director, their powers, and the functions of the Board of Governors (BoG). The HRD Ministry had set up an eight-member panel, headed by IIM-Sirmaur chairperson and industrialist Ajay Shriram, to provide suggestions for making rules.

The draft document circulated to the IIM chairpersons was based on this committee report. Other provisions of the draft rules include the appointment process of the chairperson to begin three months before the term of the incumbent ends and conclude a month before the incumbent retires. If a successor is not found within this time frame, the HRD Ministry will appoint a Board member as the acting chairperson.

The IIM chairperson’s term will automatically end once he/she turns 74 years or on the completion of four years. A chairperson can be removed only through consensus of the Board of Governors. Neither the chairman nor any Board member should have a conflict of interest with the institute. If a conflict of interest is discovered later, then the concerned person will have to resign.

The government has the power to issue directions to the IIMs if they are found to be acting in contravention of the Act. Such directions shall be binding. No person will be director of an IIM for over two terms. The retirement age of directors has been extended from 65 to 70 years.

The director can only be removed when the Board approves such action with a two-third majority. The 13 new IIMs can co-opt alumni of older IIMs as board members. In case of any doubts regarding any provisions of the rules, IIMs could seek clarification from the government and the clarification provided will be final.(Image Source:)MintLife Blog)