Friday 19 June 2015

Draft IIM Bill 2015

Why in news?
IIMs expressed their worries about the features of the Draft IIM Bill, brought by the HRD ministry, which might affect their autonomy.

What are the key provisions of the bill?

  • Board of Governors of each IIM will be the “principal executive body”, grants the Centre powers to override the Board.
  • Board can make rules and regulations regarding tenure, remuneration, etc for IIM employees — but only after taking approval from the Centre.
  • Ministry’s approval will be required for matters related to admission criteria, scholarships and fellowships as well as how to conduct Board meetings.
    • [Currently, the boards and academic councils of the institutes take such decisions independently.]
  • IIMs will be bound by Centre's decisions given in writing, on policy matters.
  • The Bill proposes to grant statutory status to 13 existing IIMs, including the IIM-A to enable them to grant degrees to their students in the academic courses conducted by these institutes.
    • [Till now, these Institutions could award only certificate, Post Graduate Diploma and Fellow Programme in Management Certificate, which lacked universal acceptability in the field of academia and research.]
  • The Bill also has a provision under which government will form a coordination body. 
    • This may lead to the centralization of power.
    • The fears are chiefly about the loss of autonomy that emanates from the proposed creation of a Coordination Forum with policy-making and oversight powers
  • The Bill states that in discharge of its functions, the IIM Board will be accountable to the government.
What are the main areas of divergence between IIM and the govt?

Source; The Hindu
  • Presently IIM are governed by Memorandum of Association
  • Issues with the coming bill related to IIM:
    • power of board to choose directors being taken away
    • IIM Diplomas, recognised internationally, are being shut down. Only degrees will remain
    • New rules in respect of following will unequivocally place all relevant powers with the Central government
      • appointing the chairperson, 
      • powers of the Board, 
      • terms and condition of the service of the director, 
      • allowances to the Coordination Forum 
      • Admission of candidates to various programmes, 
      • determining posts and emoluments of faculty and staff, 
      • formation of departments, 
      • establishment and maintenance of buildings, 
      • determining directors’ powers and responsibilities, 
      • conferring powers upon the academic council
      • Constitution of the Board requires prior government approval.
  • IIMs want contol over fee structure because:
    • The ability to hike the tuition fee allowed IIMs to incur capital expenditure, outsource procurements, implement a faculty incentive system and take decisions with far-reaching financial and operational implications. The faculty today is rewarded with low teaching loads for mandatory classes and monetary incentives for publications.

Why this move by the govt?

  • Over the years, IIM boards, with mostly non-executive members, have assumed sweeping powers. The IIM Bill might do well to focus on this anomaly.
  • The government’s moves to bring accountability to the institutes of management through legislation 
  • A situation had arisen where the IIM boards enjoy more power and are less accountable. 
    • For example, the IIMs have failed to adhere to the tradition of one term for the chairman and members. The selection process of board members has become less transparent.
  • Given the vicissitudes in government funding, IIM boards have exploited the tuition fee route, and have never articulated the rationale for fee escalations. The only argument set forth is that most students can afford to take loans and those who cannot will get varying degrees of financial aid. However, the IIMs have ignored the implications of the rising cost of management education. Faculty involvement would have ensured deeper analysis, due deliberations, and consensus building.
  • From a governance perspective, it is essential for an organisation to be financially dependent on an external source that can ask tough questions about activities and budget. 
    • Also, IIM boards have not clarified the institutions’ strategy, direction or how resources will be raised and used in the future. One would like to alter the process that gives blanket autonomy to the IIM boards.
  • a progressive move
  • should also enhance role of faculty and student bodies

This article will be updated as and when more news appears.

[Sources: PIB, Indian Express, The Hindu]


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