Parliament Passes IIM Bill Endowing President With Management Powers

The Rajya Sabha on Tuesday passed the Indian Institutes of Management (Amendment) Bill, 2023 which entrusts the management accountability of the institutes with the President of India giving more powers to the Centre, diluting the premier Business-schools’ autonomy.

The Bill was passed by voice vote. Earlier, the Bill was passed by the Lok Sabha on August 4.

The Bill seeks to amend the Indian Institutes of Management Act of 2017. It designates the President of India as a Visitor of every Institute covered by the Act.

Currently, 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.

At present, the Search Committee comprises the Chairperson of the Board, and three members from amongst eminent administrators, industrialists and educationists. The Bill reduces these three members to two and adds another member to be nominated by the Visitor.

The Bill says that the Board will require prior approval of the Visitor before removing a Director. It also grants the Visitor the authority to terminate the services of the Director, as may be prescribed. The Bill also states the Chairperson of the Board will be nominated by the Visitor.

The Bill proposes a new procedure for inquiries against IIMs. It confers the power of inquiry upon 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 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.

At present, the Act provides for a Coordination Forum for all the Institutes, the Chairperson of which is selected by a Search-cumSelection Committee. Under the provisions of the Bill, the Chairperson will be nominated by the Visitor.

Currently, the Forum comprises Chairpersons of four Institutes, by rotation for two years, nominated by the Chairperson. The Bill amends this to provide that Chairpersons of all Institutes will be ex-officio members of the Forum.

The Bill also classifies the National Institute of Industrial Engineering (NITIE), Mumbai as IIM, Mumbai.