Indian Institute of Management (Amendment) Bill 2023

Indian Institute of Management (Amendment) Bill 2023

News: The Indian Institutes of Management (Amendment) Bill, 2023, introduced in Lok Sabha, aims to change the law governing the administration of Indian Institutes of Management (IIMs).

What led to the amendments?
• Accountability issues - The 2017 Act requires the Board of Governors 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. But even after 6 years, very few of the 20 IIMs have done so.
• The absence of clear norms on key matters, such as the appointment of the dean, has been a matter of concern.
• There are variations in the level of governance among different IIMs with some lower ranked IIMs being accused of becoming private “fiefdoms” in which the director holds unchecked power.

How are IIM’s governed currently?
• The 2017 Act granted the IIMs greater autonomy by declaring them “institutions of national importance.”
• The current IIM Act allows the institutes to be run by their board of governors, which has the power to make policy decisions related to administration and functioning.

What are key provisions of amendment bill?
• The Bill designates the President of India as Visitor of every Institute covered by the Act.
• The Bill mandates the Board of Governors 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.
• The Bill provides 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.
• The Bill stipulates that the Chairperson of the Board will be nominated by the Visitor.
• 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.
• The Bill provides that the central government may prescribe the conditions and procedure for dissolving or suspending an Institute’s Board.
• The Bill provides that the Chairperson of the Co-ordination Forum for all the Institutes will be nominated by the Visitor. Chairpersons of all Institutes will be ex-officio members of the Forum.

What are some of the challenges faced by IIM’s?
• Governance within the IIM’s have been questioned.
• 493 teaching positions need to be filled up in the Indian Institutes of Management (IIMs) out of the sanctioned strength of 1566
• The quantity and quality of research carried out in the IIMs has been inadequate.
• The new IIM’s will take time to compete with old ones. It is difficult to attract quality professors to remote IIM’s (Raipur) and cost of courses is on the rise since years now.