IIM Bill 2017 Passed in Lok Sabha, One Step Closer for Autonomy, Grant of Degrees

The Lok Sabha has approved the Indian Institutes of Management Bill 2017 that promises to grant administrative, academic and financial autonomy to the IIMs and allow them to award degrees to their graduates.

The Bill seeks “to declare certain Institutes of management to be institutions of national importance with a view to empowering these institutions to attain standards of global excellence in management, management research and allied areas of knowledge.”

The draft Bill, introduced in 2015 had undergone major changes after objections were raised by the IIMs over certain clauses seen to be restricting the autonomy of the Institutes in the selection of the Director and certain other provisions. Two clauses especially, 3(k) and 36(1), had proved to be irksome under which the IIMs would have had to seek the government’s approval for every decision, including fee structure, admission criteria, the formation of academic departments, salary of the staff and constitution of the Board of Governments.

Subsequently, the controversial provisions were dropped and the Bill received the Union Cabinet’s assent in January 2017. It now requires passage by the Rajya Sabha following which it will be signed by the President to become an Act.

“In view of the above, it becomes necessary to have a Central Legislation, namely the Indian Institutes of Management Act, 2017 in the larger interest of students. The degree granting power to IIMs will not only enhance the universal acceptability of degrees being awarded by these premier institutions but also empower these institutions to attain standards of global excellence, especially in management research,”

The Statement of Objects and Reasons in the Bill states that the IIMs provide post-graduate, doctoral, post-doctoral and research education in the field of management and allied areas of knowledge. Being registered under the Societies Act, IIMs award to their students Post-graduate Diploma in Management and Fellow Programme in Management and are not entitled to use the nomenclature of Master of Business Administration (MBA) or Ph,D degree as issued by a University or Institution of National importance.

“While the Post-graduate Diploma in Management programme (equivalent to MBA) was relatively unaffected by the absence of a formal degree, the Fellow Programme in Management (equivalent to Ph.D), 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 shortages affecting the management institutions in the country,” it said.

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 Institutes of National Importance,” it noted.

“In view of the above, it becomes necessary to have a Central Legislation, namely the Indian Institutes of Management Act, 2017 in the larger interest of students. The degree granting power to IIMs will not only enhance the universal acceptability of degrees being awarded by these premier institutions but also empower these institutions to attain standards of global excellence, especially in management research,” it added.

Once it receives the President’s assent, the Bill will become an Act and with its commencement, all existing Institutes will become a body corporate by the existing names. Each institute “shall be open to all persons irrespective of sex, race, creed, caste or class, and no test or condition shall be imposed as to religious belief or profession in admitting or appointing members, students, teachers or workers or in any other connection whatsoever.”

Admission to every academic course or programme of study in each Institute shall be based on merit assessed through transparent and reasonable criteria. However, reservation in admissions will be provided as per Central Educational Institutions (Reservation in Admission) Act, 2006, the Bill stated.

There will be the Board of Governors as the principal executive body of each institute. The Board will be responsible for the general superintendence, direction and control of the affairs of the Institute. The powers shall be exercised by the Board as per regulations framed by the Board of Governors.

The Director of the Institute will be appointed by the Board, out of the panel of names recommended by a search-cum-selection committee to be constituted by it.

The Director will be the Chief Executive Officer of the Institute and shall provide leadership to the institute, exercise powers and perform the duties as may be assigned to him under this Act or the regulations or as may be delegated to him by the Board.

A coordination forum will be established with an eminent person as its Chairman to be selected by a Search-cum-Selection Committee constituted by the Coordination forum to consider matters of common interest to these institutes and facilitate the coordination amongst various institutes, sharing of experiences, ideas and concerns with a view to enhancing the performance of all Institutes.

The Bill also seeks to provide the 20 existing IIMs independent statutory status with uniform governance structure and policy framework as also to declare them as Institutions of National Importance and to enable them to grant degrees to their students in the academic courses conducted by these Institutes.

During the debate in the Lok Sabha prior to the passage of the Bill, Members had raised various points on granting complete financial autonomy, ambiguity in faculty reservations and even a proposal to change the name of Indian Institute of Management (IIM), Calcutta (IIMC) to IIM, Kolkata (IIMK). The name change was subsequently dropped on the the grounds that the institutes were globally known and any name change would adversely affect their global stature.

Human Resource Development Minister Prakash Javadekar, admitting the “tremendous government interference and control” declared his intention to remove that and grant greater autonomy to the institutes.

The IIM directors expressed happiness at the passage of the Bill. IIM Bangalore director G Raghuram expressed the hope that it will also get through the Rajya Sabha and become an Act of Parliament. Apart from enabling the IIMs to grant formal degrees, it will also give them greater autonomy primarily because the appointment of the chairperson and the director can be at the board level rather than having to be processed by the Ministry and the ACC, he added.

IIM Ahmedabad director Ashish Nanda said it will give an opportunity for them to compete effectively with the world’s best. Saibal Chattopadhyay, director, IIM Calcutta said the major beneficiaries will be the PGDM (post graduate diploma in management) and FPM (fellow programme in management) students who will be getting MBA degrees and PhDs which are globally recognised. Calling it a momentous step in the evolution of the Institutes, IIM Indore director Rishikesha Krishnan expressed the hope that it would become an enabling framework for other institutions as well.