A Bill to weaken IIMs

Dump It: The IIM Bill is a serious effort to undermine autonomy enjoyed by the institutes

Ever since the NDA government came to power, it has given single-minded attention to the HRD Ministry to review working of nearly every institution worth its name. It has now turned its focus on the IIMs, one of the most credible institutions in the country along with IITs. The Centre now wants to hold its sway over the IIMs too, by way of bringing in a Bill – which no one had demanded – giving it ample powers in every sphere of their administration.

We must give the government credit where credit is due. The government of the Nehruvian era - when free market was a bad word -  did a great job of setting up and investing heavily in institutions like the IITs and IIMs, providing them an ecosystem to develop and grow as institutions of excellence, free from unwarranted interference.

If we have been reaping the fruits of some of those institutions over the years, it is because the government of that era planted those saplings that have grown into full-fledged fruit giving trees today. But now, the proposed IIM Bill seeks to chop these very trees down to mere stumps and place them all under a giant greenhouse in the belief that this would benefit the entire flora. A typical approach where rather than trying to ensure that institutions of excellence become the benchmark which others must aspire to reach, we pull them all down to a common denominator of mediocrity.

Clearly, the Bill is bad. It is bad for the future generations, bad for the cause of higher institutions of excellence and bad for the older IIMs which have worked hard to reach a certain level of quality. It is also bad as it ignores our learning that given autonomy, Indian institutions can attain international standards.

If there is anything good at all in the bill, it is for the politicians and babus, who can now manipulate IIMs, new and old alike, controlling their admissions, fee structure, various posts and salary structures, appointments of chairmen, director and chief administrative officer and their powers, duties and responsibilities, constitution of the board, and a lot more – all of which the proposed Bill provides for – leaving the current IIM boards redundant.

In short, when this Bill becomes an Act - every single decision, including the most routine ones - would need government approval. While in the last few years, the politician-babu nexus has been aggressively eyeing the control of IIMs, the proposed Bill is the most belligerent attack yet on the relative freedom enjoyed by these institutions.

It Bill has its seeds in the R C Bhargava Committee which was set up to “review” the working of IIMs during the tenure of then HRD Minister Arjun Singh. The committee submitted its report in 2008, and with that the ammunition to the government to harass the IIMs. The committee, in its wisdom, had recommended a Pan-IIM Board of 15 members “To bring about coordination between the IIMs in all areas where this would be beneficial…to assist the government in playing its role.”
The report added that “this Board would not be involved in any day-to-day management matters of an IIM, but would approve vision and mission statements, give guidelines for framing policy, and approve two-year business plans...” That sounded innocuous enough, right?

Innocuous it was, until one read the fine print: The Pan-IIM Board was “to have full powers for raising funds, determining fees, creating or abolishing posts, and determining conditions of service of all those appointed on contract basis (incidentally the director’s is a contractual appointment).” Weren’t these the day-to-day management matters that the Pan-IIM Board wasn’t supposed to be involved in?

Interestingly, the committee had also noted that “IIMs have emerged as great teaching institutions and their products are in high demand in India and abroad” even though their research record, the committee had lamented rightly, was far from (meeting) international standards.
Nor was it evident how this new Board would mobilise funds more successfully than their respective Boards based on the strengths of their respective institutions. Even a simple question like what criteria will the Pan-IIM Board employ to distribute funds across IIMs was not clear. The Pan-IIM Board was the stick with which the HRD Ministry in 2008 launched its bid for control over these institutions.

However, following a big furore among the IIMs, the government beat a strategic retreat only to re-surface five years later under Kapil Sibal’s regime in 2013. The Babus dusted up the same report again and renewed their assault on the IIMs using the same old Pan-IIM Board as their control-cudgel. Once again, the government backed off under the onslaught of angry reactions from the IIMs.

As regards the crossing the Parliament’s path, the Bill is likely to see a smooth passage. While getting it passed in Lok Sabha is no issue, Rajya Sabha may not be worrisome since the Congress, too, had been in favour of government control over the IIMs. After all, when their interests coincide – like their pays and perks, canteen subsidies and control over IIMs – all politicians are of the same hue.

Direct control

HRD Minister Smriti Irani has rallied her forces with far more resolution and fire power – a veritable weapon in the guise of a Bill, soon to become an Act, with or without “tweaks”. Yes, henceforth, the HRD Ministry will directly control the IIMs so that the Board members would be able to open their mouths only to pop in a cashew nut!

Even to point out that the concerns of the new IIMs can hardly be equated with the older and firmly established IIMs, just because they have been christened with the same name, it appears so trite that it hardly needs any amplification. Even the new IIMs must be given at least the same level of autonomy, if not more, that the socialist regime of Nehru gave the earlier IIMs.

It is a travesty of the “maximum-governance’ maxim that the free-market government should be trying to meddle with affairs that are best left alone. But it is also true that directors of some new IIMs have been very supportive of the Bill.

If the Act comes into play, it would be a mere matter of time before VVIPs muscle in for seats for their wards in the IIM system – something they have abjectly failed to do in the current IIMs. The Act will perhaps not matter to you and me, or to the Babus or the politicos cooking the Bill, but our posterity will be much the poorer by it.

If the government has any sense, it will dump the Bill. But then, when it comes to being asinine, governments and law have a lot in common. Don’t they?


Contentious provisions of the draft IIM Bill

Most powers of the Board of Governors (BoG) ceded to the government
Ministry permission required for appointments of chairpersons and directors
BoG will need ministry approval before passing any regulation
Any changes in fees, remuneration, infrastructure, scholarships etc, will need ministry nod
A visitor as a de facto head of the institute to be appointed through the ministry

Powers of IIM at present

UPA-II gave nod for changes in MoU with government and IIMs. IIMs empowered to reduce Board members to 14 from over 26, appoint alumni in the Board,
decide on salary of faculty. These changes were made on the recommendations of three panels set up in 2010 by then HRD minister Kapil Sibal

The money comes for IIMs

 Executive education programmes, alumni contributions and government grant-in-aid.
However, IIM-A, IIM-B and IIM-C do not receive grant from HRD ministry.
nNew IIMs takes grants for combination of campus and other infrastructure funding

Statutory status to new IIMs

Grant statutory status to 13 IIMs at Ahmedabad, Kolkata, Bangalore, Lucknow, Indore, Kozhikode, Shillong, Raipur, Ranchi, Rohtak, Kashipur, Tiruchirapalli and Udaipur

Draft IIM Bill, 2015Gives IIMs the power to

To grant degrees, diplomas and other academic distinctions or titles and to institute and award fellowships, scholarships, prizes and medals, honorary awards and other distinctions

To lower cost of education and to enhance reach of education by use of information and communication technology and other innovative methods

To determine, specify and receive payment of fees with prior intimation to the Central Government and other charges as the Institute may deem fit from students and any other person, institution or body corporate for instruction and other services, including training, consultancy and advisory services, provided by the Institute

The IIM Board of Directors

Will conduct annual review of performance of the Director
Within seven years from the incorporation of the institute, and thereafter at the end of every fifth year, evaluate and review the performance of the institutes on long-term strategy and five year rolling plan of the Institutes.

Centre's Role

The institute shall be bound by such directions on questions of policy, as the Central government may give in writing to it from time to time

Decision of the Centre, whether a question is one of policy or not, shall be final.

Accountability

Accounts of every institute shall be audited by the Comptroller and Auditor-General
Every institute (should) furnish to the Centre such returns or other information
with respect to its policies or activities as the Centre may, for the purpose of reporting to Parliament or for the making of policy, from time to time, require.

Criticism

At present, Fellow Programme in Management (equivalent to a PhD) is not a formal
degree and thus not able to attract students

Net Result of IIM Bill,  Loss of autonomy?

Decisions of Board of Governors about appointment of chairpersons, directors and faculty, fixing of fees and remuneration, changes in curriculum and decisions on infrastructure have to be cleared by HRD Ministry

IIMs believe

Board's independence will go. Will be turned into an implementing body without any real decision-making powers.

They will remain under the Right to Information Act and will have to get their
accounts audited by the Comptroller and Auditor General

R C Bhargava Committee recommendations

Create a pan-IIM Board

Chairman to be nominated by PM and
Secretary of IIM Board be one of five govt nominees

 Board should review performance of each IIM once every two years

 IIM alumni should be in the Board

Board to have power to select and appoint the director, raise funds, determine fees for all courses

Build Scholarship Fund
Sponsor students to get PhD
IIMs older than five years should generate small operating surplus

(The writer is former Professor and Chairman of Post Graduate Programme, IIM-Ahmedabad)