Bill on Indian Institute of Management

This article was written by Kartik Aggarwal a student of Shri Ram College of Commerce 

INTRODUCTION

The HRD Ministry calibrated the version of the contentious Bill on the Indian Institutes of Management (IIMs) which is likely to be introduced in the Monsoon session of Parliament beginning 21st July. It is being widely criticized by the premier B-schools in the country that offer a Post Graduate Diploma in Management (PGDM), the same certificate being offered by IIMs. The Bill, if passed, would empower IIMs to award MBA degrees instead of Diplomas in management and fellowship.

The IIM Bill 2015 has left around 400 Non IIM B-schools in a fix as they find the legal, financial and market validity of their PGDM in jeopardy. The Education Promotion Society of India (EPSI) has come forward to fight for the issue of institutions offering PGDM along with the Association of Indian Management Schools. Alternate President, EPSI ,Harivansh Chaturvedi quoted that ‘EPSI has always demanded a level playing field for the autonomous private B-schools that have been in place for the last 50 to 60 years by conferring them the power to award degrees with IIMs and that this can be made possible only if these institutions are given the status of deemed universities.’

Indian management education has two career oriented qualifications namely PGDM (diploma) and MBA (degree). MBA degrees are offered by the universities or colleges affiliated to universities, whereas a PGDM is offered by institutions approved by All India Council for Technical Education (AICTE).

Degrees can only be awarded by universities and institutes such as IITs, set up by the Parliament or legislature, and those declared deemed-to-be-universities under the UGC Act. Presently, IIMs cannot award degrees as they have been set up as societies, under the Societies Registration Act.

Pritam Singh, Ex-director, MDI Gurgaon, IIM Lucknow and Ex-director general, IMI Delhi believes that the relevance of PGDM programmes are only because of IIMs, who initiated it and others followed the suit. With IIM being granted the university status, the other B-schools should also be allowed to become deemed universities.

PURPOSE OF THE BILL

The main purpose of the bill is to declare certain institutes of management (IIMs) to be institutions of national importance with a view to empower these institutions to attain standards of global excellence in management, management research and allied areas of knowledge and to provide for certain other matters connected with such institutions or incidental thereto. The Bill will enable the government to intervene in the functioning of IIMs robbing them off their autonomy.

The IIM Bill is Modi government’s first substantial education law. The bill would mainly benefit graduates applying abroad for research opportunities. Currently, an IIM alumnus has to request his or her respective institute to provide a certificate saying that the diploma is equivalent to an MBA degree in India. This step will also help IIMs gain global recognition and attract more foreign students. On the contrary, at present, the global appeal is limited to students of Indian origin.

MAJOR REASONS OF DISAGREEMENT IN THE DRAFT BILL

The leading IIMs have stood up against the bill due to a major concern that the bill empowers the Central Government to subsequently make rules for “all matters” such as appointment of the chairperson, terms and conditions for the director and administrative issues, thus, making these institutions mere operating center.

• Clause 35 and 36 that will curtail their autonomy and give powers to Central Government to           make rules in relation to the provisions of the Act.
• Board of governors will need ministry approval before passing any regulation.
• Changes in fees, remuneration, infrastructure, scholarships, etc., will need ministry approval.
• A visitor as a de facto head of the institute to be appointed through the ministry.
• Appointments of chairpersons and directors will need ministry nod.

The first three IIMs (Ahmedabad, Calcutta and Bangalore), and possibly the next two (Lucknow and Kozhikode) have developed significant brand equity of their own, which the other eight might not have. Moreover the top IIMs can probably find enough private sector funding to retain their autonomy and grow into great institutions which is contrary to what government wants through the proposed bill. The ministry seems to have used the weaker IIMs as the basis for interfering with the IIMs autonomy.

It would be plausible to provide the top IIMs their autonomy in order to ensure that these institutions continue to be the center of excellence with the government directing its investments on the newer ones.

CURRENT STATUS

Owing to the deluge of criticisms, HRD ministry is likely to redraft the bill incorporating the changes suggested by the premier business schools. The HRD ministry, headed by Smriti Irani, would probably extend the deadline for seeking public comments on the bill, following the requests from IIM-Ahmedabad and IIM-Lucknow. The ministry had earlier sought public comments and feedback’s between 9 June and 24 June. IIM-A chairman A.M. Naik has asked the ministry to extend the deadline to 31 July.

Looking at the suggestions of some IIMs, especially IIM-A, it seems an extension is required. If the deadline gets extended to 31 July, then it is very clear that the bill cannot be tabled in the coming monsoon session, according to a government official.

Rather, the ministry would require more time to go through the feedback that it has already received and incorporate some of them in the draft to avoid further revolt by giving special attention to three sections—3(k), 35 and 36 that empowers the Union government to set rules for IIMs. However, the basic premises of the bill, including allowing degree-granting power to IIMs and facilitating excellence, will remain unchanged.