Lok Sabha passes IIM (Amendment) Bill giving centre more powers; NITIE to be IIM Mumbai

NEW DELHI: The government on Friday passed the Indian Institute of Management (Amendment) Bill replacing the six year old IIM Act. Amid Opposition's sloganeering the Bill was passed by conducting a voice vote.

The Bill, when passed in Rajya Sabha as well, will amend the IIM Act of 2017 that conferred greater autonomy to IIMs in both academic and administrative functions. The Bill introduced by the union education minister Dharmendra Pradhan seeks to limit the autonomy of the IIMs across India by appointing the President of India as Visitor of IIMs.

Before the 2017 Act was enacted, the education ministry had the sole powers to appoint IIM directors, chairpersons and board members. After the amendment comes into effect, the IIMs, that also hold the ‘institutes of national importance (INI)’ status, will be at par with the Indian Institutes of Technology (IITs) and other central universities where the President of India is Visitor.

In addition, the Bill has also upgraded the status of the National Institute of Industrial Engineering (NITIE), Mumbai as IIM, Mumbai. The institute will be the 21st addition to the list of IIMs and second such institution in the state of Maharashtra including IIM Nagpur.

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IIM Bill 2023: President as Visitor

The Bill mandates the board of governors– a principal executive body of each IIM–to obtain the prior approval of the Visitor before appointing institute’s director. Under the existing Act, the director of an IIM is appointed by the board of governors, based on the recommendations of a search-cum-selection committee.

The procedure for selecting the Director will be prescribed by the central government, as per the amendment. Under the Act, the search committee comprises the chairperson of the board, and three members from amongst eminent administrators, industrialists, educationists. The Bill reduces these three members to two, and adds another member to be nominated by the visitor.

According to the Bill, the board of governors will now require prior approval of the visitor before removing a director. The Bill adds to the power of the visitor to terminate the services of the director.

More powers to union government

The amendment Bill has also removed old provisions that empower board members to initiate an inquiry against the institute in case the IIM does not follow the law by giving more powers to the visitor.

“The Visitor may appoint persons to review the work of any Institute and hold inquiries into its affairs. Based on the report of such inquiries, the Visitor may issue directions which will be binding on the Institute. The Board may also recommend such inquiries to the Visitor.,” the Bill states.

The Bill also gives more power to the government by conferring powers to dissolve or suspend the board of governors. “The Bill provides that the central government may prescribe the conditions and procedure for dissolving or suspending an Institute’s Board. If a Board is suspended or dissolved, the central government will constitute an interim board for six months or until a new Board is constituted,” the Bill reads.

Clash over autonomy

IIMs have been in discord with the government over dilution of autonomy even before. For instance in 2019, despite objections from the then Ministry of Human Resource and Development (MHRD), four older IIMs–IIM Ahmedabad, IIM Bangalore, IIM Indore and IIM Calcutta–went ahead with their plan of awarding degrees for their one-year post-graduate programme.

The centre had directed IIMs to immediately take “corrective action” regarding their one-year MBA as the University Grants Commission Act 1956 does not provision for a one-year degree programme.

While the first and a few of the second generation IIMs are largely autonomous, third generation IIMs are dependent on government funding.