What’s the news?

• A new amendment bill introduced by the Centre in the Lok Sabha has sparked a debate on the autonomy of the Indian Institutes of Management (IIMs). The bill proposes to make the President of India the Visitor to IIMs with powers to audit their functioning, order probes, and appoint as well as remove directors.

Central idea

• In 2017, the Parliament passed the IIM Act, significantly expanding the autonomy of IIMs and giving them greater control over their affairs. One crucial provision mandated an independent review of the institutes every three years, with the report to be made public. However, after six years, only a few IIMs have complied with this requirement, leading the government to table the IIM (Amendment) Bill in 2023.

The proposed provisions in the Bill

• Creation of the Post of Visitor: The Bill proposes the creation of the post of Visitor, who will be the President of India. The Visitor will play a crucial role in overseeing the functioning of the IIMs and ensuring proper governance.
• Appointment Powers: The Visitor will have the authority to appoint the chairperson of the Board of Governors (BoG) of the IIMs. This move grants the President of India a significant say in the leadership of the institutes.
• Involvement in Director Appointments: The Bill empowers the Visitor to have a say in the appointment process for directors of IIMs. The Visitor will have representation on the selection committee for the appointment of directors, allowing them to influence the choice of institute heads.
• Review and Inquiry Initiation: The Visitor will have the power to initiate reviews or inquiries into the affairs of any IIM. This provision allows for greater oversight and scrutiny of the institutes’ functioning.
• Director Removal: The Visitor will be granted the authority to remove a director of an IIM if deemed necessary. This move gives the President the power to take action against directors who may not be performing their duties effectively or who are involved in any misconduct.

Issues with the Current Governance

• Lack of Accountability: The current governance structure in IIMs lacks adequate accountability due to the significant autonomy granted by the 2017 IIM Act. This has led to a governance vacuum with limited checks and balances on directors’ actions, potentially resulting in mismanagement.
• Absence of Norms on Key Matters: The IIM Act’s failure to establish clear norms on crucial matters, such as the appointment of key positions, has led to a lack of transparency and objectivity in decision-making.
• Turmoil and Protests: Some IIMs have experienced internal turmoil and protests against administrative decisions, indicating a disconnect between management and stakeholders.
• For instance, at IIM Ahmedabad, faculty and alumni protested against changes to the institute’s logo and the decision to demolish architecturally significant structures on the campus.
• Rising MBA Course Fees: An additional concern with the current governance is the relentless rise in the fee for MBA courses, which is not necessarily related to the actual costs of the course.
• Unresponsive to Queries and Suggestions: There have been reports that some IIMs have been unresponsive to queries and suggestions from various stakeholders, including the government.
• Uneven Governance Practices: The level of governance and accountability might vary across different IIMs. Some of the lower-ranked IIMs have been accused of operating as petty tyrannies, with directors holding unchecked power.

Importance of Government Control

• Ensuring Accountability: Government control is crucial to ensuring accountability in the functioning of educational institutions, including the Indian Institutes of Management (IIMs). It helps prevent misuse of power, financial irregularities, and a lack of transparency.
• Preserving the Public Interest: As public institutions, IIMs have a responsibility to serve the public interest. Government control ensures that the institutes remain focused on their core mission of providing quality education and contributing to socio-economic development.
• Academic Integrity: Government oversight safeguards academic integrity by promoting fairness in faculty appointments, curriculum design, and research activities.
• Addressing Societal Needs: Government involvement allows IIMs to align their objectives with societal demands, producing graduates with relevant skills to address the country’s evolving challenges.
• Equitable Access and Affordability: Government control promotes inclusivity by implementing policies that ensure equal access to quality education, irrespective of socio-economic backgrounds.
• Quality Assurance: Government oversight allows the establishment of quality assurance mechanisms, ensuring that the IIMs maintain their reputation as world-class institutions adhering to global standards.

Concerns Regarding the IIM Amendment Bill 2023

• Potential Government Control: Critics and some directors of IIMs are concerned about increased government control over the institutions through the designation of the President of India as the Visitor with powers to appoint and remove directors.
• Autonomy Erosion: The bill has raised fears that it may undermine the autonomy granted to IIMs in 2017, potentially leading to a dilution of their independence and decision-making authority.
• Lack of Stakeholder Involvement: Stakeholders, including directors of IIMs, are apprehensive about insufficient consultation during the bill’s drafting, which they believe could impact the institutes’ governance.
• Apprehensions About the Independent Board Model: Critics argue that the existing independent board model governing B-schools has been successful globally and could continue to be effective in India without introducing a Visitor.
• Potential for Ideological Influence: The critiques allege that the bill may be used to enforce ideological conformity, raising concerns about the Visitor’s influence over the institutes’ academic pursuits.
• Impact on Institutional Reputation: Uncertainty surrounding the bill could affect IIMs’ reputation, leading stakeholders to question their stability and governance.

Way Forward

• Inclusive Consultation: The government should engage in inclusive consultations with IIMs, education experts, policymakers, and stakeholders to address concerns and ensure broad consensus on the bill’s provisions.
• Amendment Refinements: Based on feedback received during consultations, the government should consider refining the bill’s provisions to strike an appropriate balance between accountability and autonomy.
• Codifying Norms: Clear norms and guidelines should be incorporated into the bill to provide a framework for responsible governance while allowing flexibility in decision-making.
• Promote Transparency: The bill should emphasize transparency in decision-making processes and overall governance to build trust among stakeholders.
• Continuous Evaluation: Implementing a system of continuous evaluation and feedback will help gauge the effectiveness of the bill’s provisions.
• Focus on Quality Education: The primary focus should remain on maintaining and improving the quality of education in IIMs while fostering greater accountability.

Conclusion

• The Bill reflects the government’s efforts to restore accountability and democratic oversight in the IIM system. Striking the right balance between autonomy and accountability is vital to maintaining the IIMs’ esteemed position in the Indian education landscape.

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