Context: 

Recently, the Indian Institutes of Management (Amendment) Bill, 2023 was introduced in the Parliament seeking changes in the law that governs the administration and running of IIMs. 

About IIM Act, 2017:

• Expansion of Autonomy: In 2017, Parliament passed the Indian Institutes of Management (IIM) Act which hugely expanded the autonomy of the IIMs.
• Independent Review: It requires the Board of Governors (BoG) of the IIMs to commission an independent review of the institutes at least once every three years and place the report in the public domain.
  • All key appointments, of the chairperson and board members, the director and the chairperson of the Coordination Forum of the IIMs were left to the BoG. 
  • The government reduced the presence of the Central and State governments on the Board from four members to two.
• Inquiries against IIMs: The Act empowers the Board to initiate an inquiry against an Institute if it has not been functioning in accordance with the Act.  
  • A retired High Court judge conducts such inquiries.   
  • Based on its findings, the Board may take any action that it deems fit.  
• Coordination Forum: The Act provides for a Coordination Forum for all the Institutes.  
  • The Chairperson of the Forum is selected by a Search-cum-Selection Committee, constituted by the Forum. 

Concerning Matter: 

• Six years on, very few of the 21 IIMs have done so with the provided provisions. 
  • Among the top four IIMs, only the review report of IIM Bangalore is available on the website. 
  • This act of omission resulted in the introduction of the IIM (Amendment) Bill in the Parliament. 
• Lack of Checks & Balances: There were no meaningful checks and balances powers with the director.
• Lack of Accountability

Provisions of the IIM (Amendment) Bill, 2023:

• Visitor:
  • It creates the post of Visitor, the President of India. 
  • The Visitor will appoint the chairperson of the BoG, one nominee on the selection committee for the director, and the chairperson of the Coordination Forum for the IIMs. 
  • He or she will also approve all director appointments. 
  • The Visitor can initiate any review of or inquiry into the affairs of an institute and remove the director on his or her own.
• Appointment and removal of IIM Directors: 
  • Under the Act, the Director of an IIM is appointed by the Board of Governors, based on the recommendations of a Search-cum-Selection Committee.  
  • The Bill mandates the Board to obtain the prior approval of the Visitor before appointing an Institute Director.  
  • The procedure for selecting the Director will be prescribed by the central government.   
  • Removal: Under the Act, the Board may remove the Director from office on following grounds:
    • Insolvency
    • Mental and physical incapacity
    • Conflict of interest
  • The Bill adds that the Board will require prior approval of the Visitor before removing a Director.  
  • The Bill also grants the Visitor the authority to terminate the services of the Director, as may be prescribed.
• Inquiries against IIMs: 
  • The Bill confers the power of inquiry upon the Visitor.  
  • 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.
• Dissolution of the Board:  
  • 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.
• Coordination Forum: 
  • The Bill states that the Chairperson will be nominated by the Visitor.   
  • Under the Act, the Forum also comprises the Chairpersons of four Institutes, by rotation for two years.    
  • The Bill amends this to provide that Chairpersons of all Institutes will be ex-officio members of the Forum.
• Incorporation of Institutes: 
  • The Act of 2017 provides that when an existing institution converts to an IIM under this Act, every employee of such institution will retain the same tenure, salary, pensions as before.  
  • The Bill excludes the Director of such institutions from this provision.

A Quick Comparison:

Conclusion:

The Bill is seeking to restore accountability and transparency in the IIM system. There is always a need to maintain a strike balance between autonomy and accountability, and the recently taken step by the government is in the desired direction.

News Source: The Hindu