HRD puts on hold Rs 20-crore IIM seat sale

The human resource development (HRD) ministry has put on hold a proposal to make membership of managing societies of the Indian Institutes of Management conditional on the payment of “substantial” donations. Charu Sudan Kasturi reports.

The human resource development (HRD) ministry has put on hold a proposal to make membership of managing societies of the Indian Institutes of Management conditional on the payment of “substantial” donations.

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The ministry has decided against accepting the proposal of the panel appointed by HRD minister Kapil Sibal under Maruti Udyog chairman RC Bhargava because the recommendation, “though well meaning, could be misunderstood,” top government sources on Tuesday told HT.

The ministry sources said they had decided to steer clear of the proposal at a meeting with IIM directors last October itself. The minutes of that meeting reflect the ministry’s decision of not accepting proposal, they argued.

But IIM teachers — who have been opposing the recommendation — countered that the government has never publicly and formally said it had “struck down” the proposal.

Faculty across the IIMs have been protesting this proposal, which they argue could lead to the privatisation of the premier B-schools — despite assurances from Sibal last Friday.

As reported by HT on Tuesday, the faculty association at IIM Calcutta - the country's oldest IIM - on Monday placed on the Institute a public critique of the proposal and other key recommendations of the Bhargava panel and another committee under Rediff chief Ajit Balakrishnan.

The proposal involves restructuring the IIM societies and inviting private firms to join the society in exchange for a R20 crore donation. Individuals can join the managing society of an IIM for a donation of R5 crore while alumni can become members for R3 crore under the Bhargava panel's proposals.

The principle behind the proposal is not completely new, ministry sources argued. The memorandum of association (MoA) between IIM Bangalore and the government allows private parties to become members of the managing society of that B-school for a donation of Rs. 4 lakh.

But the Bhargava panel's report suggests that membership be made conditional on donations - potentially ruling out other membership routes - faculty countered. The panel's recommendation - if accepted - would also extend to all IIMs.