The human resource development ministry has rejected key amendments proposed by the Indian Institute of Management (IIM) Bangalore to its fundamental statute book aimed at ending government power over major decisions at the premier B-school.
The HRD ministry has called seven proposed amendments to its memorandum of agreement (MoA) with the IIM “not acceptable” since the IIMs are public institutions, documents available with HT show. The IIM submitted its proposed MoA amendments to the HRD ministry in January.
The IIM-B Board of Governors (BoG) – which finalised the amendment plan -- is headed by Reliance chief Mukesh Ambani.
The ministry’s move has triggered concern at other IIMs too since they are seeking similar amendments to their MoAs with the government. Unlike his predecessors Arjun Singh and Murli Manohar Joshi, current HRD minister Kapil Sibal has encouraged the IIMs to seek greater autonomy.
“We too have similar amendment proposals and hope the government will reconsider its position,” an IIM Director said, speaking on condition of anonymity. But the government has deep reservations about some of the proposed amendments, which sources said could change the “fundamental character” of the IIMs from public institutions.
The IIM-B proposals struck down include ending the government’s power to “take over the administration and assets of the Institute” if dissatisfied with its functioning, and making it mandatory for the government to obtain approval of the IIM’s Board of Governors (BoG) to probe irregularities.
The HRD ministry has also rejected a proposal to delete a clause that allowed the government a role in deciding the IIM’s mandate. The ministry in its response to the IIM has also pointed out that contrary to its proposal, the Institute cannot award degrees as it is neither a deemed university nor established under a central or state legislation.
The ministry has rejected a proposal to end government role in deciding the fate of assets and property bought from government money, and a proposal to end the IIM’s responsibility towards improving management education in southern India.
It has asked the IIM to put on hold a proposal to allow the IIM Board to pick the Institute Director without any government role.
The Directors are at present appointed by the Board – but based on the recommendations of a search-cum-selection panel appointed by the government. The IIM-B proposal argued for allowing the BoG to decide the “terms and conditions” for appointment of the Director instead.
HRD minister Kapil Sibal had in a recent meeting with the IIMs proposed that a national Collegium of experts – which the government is planning to set up – could pick Directors of the B-schools. The IIMs had at the time agreed.
The HRD ministry in its response to the IIM-B proposal has argued that the MoA can be amended to incorporate this mechanism for selection of Directors once the Collegium is set up.
The ministry – apart from rejecting outright seven proposals – has also said it does not support several other proposed amendments pitched by the IIM.
The IIM has proposed making the salaries of its faculty and staff independent of government pay scales. But the ministry in its response has said that it "would be prudent top retain government pay structures which could however be topped up by providing incentives."
This means that while the government is ready to allow the IIMs to pay additional incentives to teachers, their basic pay structure must remain in conformity with government pay scales, a senior official told HT.
The HRD ministry has also insisted that the IIM retain reservations for scheduled castes and scheduled tribes among government representatives on the Institute BoG and Society. Representation of the All India Management Association (AIMA) – an apex body of management institutions – must also be retained on the IIM Board and Society, the government has said. The IIM wanted to end AIMA representation.
The ministry has also clarified that while it supports the IIM in its plans to expand outside India – by setting up campuses and institutions abroad -- the Institute must not divert internal resources or use government funding for this expansion.
But the ministry has accepted other proposed amendments to the MoA – such as reducing the size of the BoG from 26 at present to 16. A government-appointed panel under Maruti chairman RC Bhargava had recommended downsizing BoGs of the IIMs.
A proposal to raise the quorum required to call a meeting of the BoG from one-tenth of the Board size to one-third has been accepted.
The IIMs have debated and worked on amendments to their MoAs for over four years now, and Sibal – in meetings with the IIMs has told them that he supports their plans for greater autonomy.