Union Cabinet approves IIM Bill 2017; IIMs may grant MBA Degree soon

Union Cabinet approves IIM Bill 2017The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the Indian Institute of Management (IIM) Bill, 2017, under which the IIMs would be declared as Institutions of National Importance (INIs). The Bill aims to enable IIMs to grant degrees to their students. At present, all the 20 Indian Institutes of Management (IIMs) grant diploma for their flagship 2-year management programmes.


The IIMs

The Indian Institutes of Management are the country's premier league institutions imparting quality education in management on globally benchmarked processes. Presently there are 20 IIMs with each having separate autonomous bodies registered under the Societies Act.


IIMs being societies till date are not authorized to award degrees and, hence, they have been awarding Post Graduate Diploma and Fellow Programme in Management. While these awards are treated as equivalent to MBAs and Ph.D respectively, the equivalence is not universally acceptable, especially for the Fellow Programmes.


The IIM Bill Journey

Former Union Minister of HRD, Smriti Irani had come up with the Draft IIM Bill, 2015. Once out in public, the Bill generated outcry across the country as it was seen as a move to abridge the autonomy of the premier B-Schools in the country (read IIMs). Some of the provisions of the previous Bill were seen as the major bone of contention. This included a proposal which sought that of the 15 members of each institute’s board of governors, the Union government would nominate seven, directly or indirectly. Moreover, the chairperson would be appointed by the MHRD as would the directors of all IIMs.


The Bill also made provisions for MHRD approval for all the decisions taken by the board of governors relating to the appointment of committee chairpersons and faculty members, prescribing tuition fees and faculty remuneration and introducing curriculum changes.


Following backlash, the MHRD sent the Bill for rework on intervention from the PMO and with new Minister taking charge of the Ministry the consultation on improving the draft Bill began a few months back.


The first committee to give some shape to IIM Bill was Bhargava Committee in the year 2008. Following this, the first IIM Bill was proposed in 2012 during UPA-2.


The IIM Bill 2017

There have been apprehensions related to the proposed Bill as it was seen as a move to bring in government interference into the functioning of IIMs. Those opposing the Bill have been arguing that if the Bill is finally passed, government permission will be required to bring in administrative decisions. Some also think that it will also hinder the innovative thinking and functioning of these institutes which are of strategic importance to the country. The present Bill has given complete autonomy to the IIMs thus silencing the critics to some extent. 

The present Bill also proposes removal of President as the ‘Visitor’ to these institutions. This means that unlike central universities and IITs, the President will not have the power to audit the working of IIMs or order a probe.


Now the power resides with the Board of Governors (BoG) to get an inquiry conducted by a person not below the rank of a High Court judge against a director in case it is felt that the institute has not performed as per the provisions of the proposed Act. As per reports, the proposed Bill also empowers the BoG to even remove the director of the institute or order any other action which would be appropriate.


Salient features of the Bill:

  1. IIMs can grant degrees to their students

  2. The Bill provides for complete autonomy to the Institutions, combined with adequate accountability.

  3. Management of these Institutions would be Board driven, with the Chairperson and Director of an Institution which will be selected by the Board.

  4. A greater participation of experts and alumni in the Board is amongst other important features of the Bill.

  5. Provision has also been made for inclusion of women and members from Scheduled Castes/Tribes in the Board.

  6. The Bill also provides for periodic review of the performance of Institutions by independent agencies, and placing the results of the same on public domain.

  7. The Annual Report of the Institutions will be placed in the Parliament and CAG will be auditing their accounts.

  8. There is also a provision of Coordination Forum of IIMs as an advisory body.

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