IIM Amendment Bill: A Step in the Right Direction

Syllabus: GS2/ Education

In News

• The Lok Sabha recently passed the Indian Institutes of Management (Amendment) Bill, 2023.

About IIMs

• Indian Institutes of Management (IIM) are the country’s premier institutions imparting the best quality education in management on globally benchmarked processes of education and training in management. 
• IIMs are recognized as world-class management Institutions and Centers of Excellence and have brought laurels to the country. 
• All IIMs are separate autonomous bodies registered under the Societies Act.
• Being societies, IIMs are not authorized to award degrees and, hence, they have been awarding Post Graduate Diploma and Fellow Programme in Management. 

Indian Institutes of Management (Amendment) Act, 2017

• The IIM Act of 2017 declared IIMs are institutions of national importance and sought to improve the governance at IIMs to help these institutions attain “standards of global excellence in management, management research and allied areas of knowledge”.

Need for the Amendment 

• The Indian Institutes of Management Act of 2017, hugely expanded the autonomy enjoyed by the IIMs, and contains an important clause. It requires the Board of Governors (BoG) of the IIMs to commission an independent review of the institutes at least once every three years and place the report in the public domain. 
  • However, very few of the 21 IIMs have done so.
• A dangerous governance vacuum has been created in the IIM system in the years since the government relinquished control over these institutes.
• The IIM Act 0f 2017 created a situation where there were no meaningful checks and balances on the director of IIMs. 

Key provisions of IIM (Amendment) Bill, 2023

• President of India as a Visitor: It designates the President of India as a Visitor of every Institute covered by the Act.
• Appointments: As per the IIM Act, 2017, the chairperson of the board of governors and the institute’s director are to be appointed by the board of governors. The board of governors includes the chairperson, director, government nominees, eminent persons, and faculty.
  • The recent amendment altered the selection process to include the involvement of the Visitor (President of India) such that the Visitor nominates the chairperson, and the selection committee for director will consist of one member (out of three) nominated by the Visitor. 
• Constitution of Search Committee: At present, the Search Committee comprises the Chairperson of the Board, and three members from amongst eminent administrators, industrialists and educationists. 
  • The Bill reduces these three members to two and adds another member to be nominated by the Visitor.
• Termination of Director: The Board will require prior approval of the Visitor before removing a Director. It also grants the Visitor the authority to terminate the services of the Director, as may be prescribed. The Bill also states the Chairperson of the Board will be nominated by the Visitor.
• Inquiries against IIMs: The Bill proposes a new procedure for inquiries against IIMs. It confers the power of inquiry upon the Visitor. The Visitor may appoint persons to review the work of any Institute and hold inquiries into its affairs.
• Based on the report of such inquiries, the Visitor may issue directions which will be binding on the Institute. 
• Conditions for dissolving Board: The Bill provides that the central government may prescribe the conditions and procedure for dissolving or suspending an Institute’s Board. If a Board is suspended or dissolved, the central government will constitute an interim board for six months or until a new Board is constituted.
• Coordination Forum: At present, the Act provides for a Coordination Forum for all the Institutes, the Chairperson of which is selected by a Search-cumSelection Committee. Under the provisions of the Bill, the Chairperson will be nominated by the Visitor.

Concerns about autonomy & interference

• Various critics have suggested that this revised selection process, which includes the President (who shall presumably act on the advice of the central government), amounts to excessive interference by the government in the functioning of IIMs.
• The critics are concerned about whether the bill will dilute the autonomy of IIMs in the name of fixing accountability.

Counter claims & way ahead

• Global practice: The notion that government control is inimical to the functioning of an educational institution is flawed. 
  • The state-controlled universities in the California system, where the Governor of the state often sits on the board, are among the best in the world. 
• Government control on IITs: Government control has not kept the IITs from creating a brand that is way above that of the IIMs. 
  • The President of India is the Visitor of all the central universities and IITs and appoints their vice-chancellors and directors. 
  • The IIM brand itself flourished for around the last six decades under government control because the IIMs enjoyed the fullest autonomy in all operational matters. 
• Principle of democratic accountability: Also, IIMs are public institutions & no public institution can be exempt from the principle of democratic accountability.