Govt likely to redraft IIM bill

Deadline for public comments may be extended; bill unlikely to be tabled in monsoon session of Parliament


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

New Delhi: The human resource development (HRD) ministry is likely to redraft the controversial Indian Institute of Management (IIM) bill to incorporate changes suggested by some of the premier business schools after criticism that the proposed legislation was designed to erode their autonomy and vest sweeping authority with the government.

With the bill likely to go back to the drafting stage, it is unlikely to be tabled in the monsoon session of Parliament that begins on 21 July, two government officials said, requesting anonymity.

The ministry’s retreat on the bill, which has been surrounded by controversy since being put in the public domain in the second week of June, signals a victory for the IIMs. The draft drew sharp criticism from the IIMs and industry, who claim the bill in its current form will turn the premier B-schools into mere “operating centres” with all major decisions being taken by the Union government.

“IIMs are doing just fine. If a bill is required at all, it needs to be redrafted,” said Vamshidhar Guthikonda, an alumnus of IIM-Bangalore. The ministry needs to disclose why it needs to bring a bill to control IIMs, said Guthikonda.

The HRD ministry, headed by Smriti Irani, is likely to extend the deadline for seeking public comments on the bill, following requests from IIM-Ahmedabad and IIM-Lucknow. IIM-A chairman A.M. Naik has asked the ministry to extend the deadline to 31 July. The ministry had earlier sought public comments and feedback between 9 June and 24 June.

“If you look at the suggestions of some IIMs, especially IIM-A, then an extension is required. If the 31 July deadline is accepted, then it is very obvious that the bill cannot be tabled in the coming monsoon session,” said the first government official.

In fact, it will take the ministry more time to go through the feedback that it has already received and incorporate some of them, the second official said.

“In a way, reworking the bill seems a must at this point of time. If we keep the controversies aside, still some suggestions need to be looked at with favour and this means reworking the bill,” the official said.

IIMs have also complained that the draft that was discussed with them and the one that was put up for public comments were different. “If the bill is passed in the current format, then there will be a revolt in the IIM system,” J.J. Irani, chairman of the board of governors of IIM-Lucknow, said in an interview on Thursday.

The first government official said that three sections—3(k), 35 and 36—will be given special attention as some IIMs have raised objections to them. These sections empower the Union government to set rules for IIMs.

While the first clause reads: “Regulations mean regulations made by the board with the approval of the central government”, section 36 states: “The board may, with the approval of the central government, by notification, make regulations not inconsistent with this Act and the rules made there under to carry out the provisions of this Act”.

The official said that IIM-A has asked to remove the phrase “with the approval of the central government” from section 3 and section 36 as they believe it will erode the autonomy of the institute. “The HRD ministry shall have a look at it. The HRD minister (Irani) was travelling and is back in Delhi now and the issue will be discussed at the minister’s level.”

The IIMs also want section 35 to be removed as it was not discussed with them. Section 35 empowers the Union government, among other things, to “make rules, for carrying out the provisions of this Act”.

“In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely: (a) manner of appointment of chairperson under clause (a) of sub-section 2 of section 11; (b) such other powers and duties of the board under clause (x) of sub-section 2 of section 12; (c) the terms and conditions of service.”

“Some of the IIMs feel that the bill should allow them the flexibility to fix compensation to its staff,” the first official said. There has been a growing clamour for IIMs to get more flexibility to decide on the compensation of teaching and administrative staff if they so deserve. There is a clause in the draft bill which proposes that IIMs seek central government permission for such a move.

Naik, who is also group executive chairman of Larsen and Toubro Ltd, said in his 24 June letter to the minister that the present bill needs a relook as it is favouring a “sweeping centralization of authority”.

The second official said some 14 different clauses were questioned by the IIMs. IIM-A director Ashish Nanda and IIM-Bangalore director Sushil Vachani said they are hopeful of resolving the issues after discussions with the ministry.

The basic premises of the bill, including allowing degree-granting power to IIMs and facilitating excellence, will, however, remain unchanged, the government officials cited above said.

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