Centre agrees to most of IIMs’ demands on autonomy

The HRD ministry will have ‘negligible or no say’ in matters such as fee determination at IIMs


A file photo of IIM Ahmedabad. Photo: Mint
A file photo of IIM Ahmedabad. Photo: Mint

The Union human resources development (HRD) ministry has agreed to most of the demands on autonomy made by the Indian Institutes of Management (IIMs) in the proposed IIM Bill following interest shown by the Prime Minister’s Office, at least three government officials said.

The bill, which is now with the Union cabinet, has been diluted significantly, accommodating demands from these elite business schools which had been on a confrontation course with the HRD ministry for over a year now, the officials said, speaking on condition of anonymity.

The HRD ministry will have “negligible or no say” in matters such as fee determination, key recruitments except that of the director, composition of the board of governors, the number of government nominees on the board and the powers of a coordination forum, the officials said.

“Since IIMs are charging market prices from students as course fees, there was a belief that while talking about fee control in the private sector, you cannot allow IIMs to go untouched. But this has not been well received by either the IIMs or the higher levels of the government,” one of the officials said.

“In the final bill that has gone to the cabinet, the fee determination decision completely rests with the IIMs and the ministry will have no say. Earlier, the bill had proposed to give the HRD ministry the final say on such matters,” the official added.

Though the bill had the primary objective of empowering IIMs to grant degrees instead of diplomas, it had several provisions that the institutes felt would affect their autonomy.

In June 2015, IIM Lucknow chairman J.J. Irani had told Mint that “there will be a revolt in the IIM system” if the first draft of the bill was passed. The then IIM Ahmedabad chairman and group managing director of Larsen & Toubro Ltd, A.M. Naik had asked the ministry to rethink the bill as it was favouring a “sweeping centralization of authority”.

A second official said that between June 2015 and August, the bill had undergone several changes. “IIMs now have the last laugh with most of their demands getting incorporated in the new bill after Prime Minister’s Office suggested that the bill needs to be liberal in outlook,” the official said.

“The older IIMs are self-sufficient and do not need funds from the central government. So, the argument is, if they don’t need funds, why should there be excessive government control of their functioning? But you cannot have two sets of rules for older and newer IIMs. Hence, the liberal rules are for all the IIMs,” this official said.

India now has 19 IIMs, up from six 10 years ago.

The second official said in all recruitments except that of director, the IIMs will have the final say. Candidates for the director’s post will be chosen by a search-cum-selection committee to be set up by the government, not the IIMs.

The shortlisted names will first go through HRD ministry scrutiny and be approved by the president. Earlier, the president had no role in the appointment. The president is the visitor (head) of all central universities and other top centrally-funded institutions, and the final appointment of vice-chancellors and chief executive-level positions are approved by the visitor. “This is what has been introduced afresh and IIMs have no problem with it,” said the official.

An earlier plan to have a visitor’s nominee to review the work of IIMs as and when the president feels has not found any takers and thus is not included in the bill.

As against the HRD ministry’s earlier proposal for inducting two alumni on IIM governing boards, alumni will now have five posts in the boards. There will be one government nominee, as against the previous proposal for two. The government nominee will be the secretary, higher education, or anyone he or she nominates for the post.

The IIM coordination forum led by the HRD minister will be an advisory body rather than a decision-making body. It will not be able to give any policy direction, the third official said.

A professor of an older IIM said controversies around the IIM Bill have now subsided. The government has listened to most of the demands related to functional autonomy. The professor, who declined to be named, added that the final bill that has gone to the cabinet has not yet been shared with the institutes.

An HRD ministry spokesperson declined to comment.

“Autonomy for the IIMs is a must if you want them to leapfrog to the next stage of development, recognition and global rankings. Instead of interfering in day-to-day administrative matters, IIMs should be given a broad contour of regulations to function on their own. If the IIM Bill allows this, then it’s good and if not, then such provisions must be included where these B-schools have administrative autonomy,” said Narayanan Ramaswamy, partner and head of the education practice at consulting firm KPMG.

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