Date : 02/08/2023

Relevance – GS Paper 2 - Polity – Government Policies and Interventions

Keywords – BoG, IIMs, IITs, Accountability

Context –

The government introduced the IIM (Amendment) Bill in 2023, which aims to revoke some of the powers delegated to the IIMs in the Indian Institutes of Management (IIM) Act of 2017.

The Imperative for Revisiting IIM Governance

In 2017, the Indian Parliament passed the Indian Institutes of Management (IIM) Act, granting significant autonomy to the IIMs. However, an essential clause in the Act mandated the Board of Governors (BoG) of the IIMs to conduct an independent review of the institutes every three years and make the report public. Unfortunately, after six years, only a few IIMs have complied with this requirement, raising concerns about governance and accountability.

In response to this non-compliance and growing concerns about governance, the government introduced the IIM (Amendment) Bill in 2023. The Bill aims to revoke some of the powers delegated to the IIMs in the 2017 Act, while also establishing a new position of Visitor, who will have increased oversight and authority over the institutes.

Provisions of the 2023 Bill

The 2017 legislation marked a significant shift in power, leaving key appointments and decisions to the IIMs' BoGs. The 2023 Bill seeks to undo many of these provisions and creates the position of Visitor, to be appointed by the President of India. The Visitor will have the authority to appoint the BoG chairperson, a nominee on the director's selection committee, and the chairperson of the Coordination Forum for the IIMs. Additionally, the Visitor can initiate reviews or inquiries into the institutes' affairs and has the power to remove directors if necessary.

Reports suggest that the government's dissatisfaction with the IIMs' lack of responsiveness to queries and suggestions is a driving force behind this amendment. However, there are deeper concerns related to the recent turbulence within the IIM system, including issues at IIM Ahmedabad, IIM Calcutta, and IIM Rohtak, among others. Some lower-ranked IIMs have also faced allegations of directorial abuse of power and an arbitrary increase in MBA course fees.

Challenges and Issues with the 2017 Act

The 2017 Act resulted in a governance vacuum, with limited checks and balances on the directors' authority. The two government nominees on the BoG played a passive role, while other board members lacked a personal stake in the institutions, leading to limited oversight. Moreover, the Act failed to establish clear norms for key matters, such as the appointment of deans, exacerbating the situation.

The absence of clear accountability also raised questions about the boards' responsibilities, leading to ineffective governance. Comparisons with private universities in the U.S., which often have robust boards of trustees, highlighted differences in funding models, motivations, and competitive environments that affected board effectiveness.

Government Control and Accountability

Critics of the 2023 Bill may argue that government control is detrimental to educational institutions. However, examples of state-controlled universities in California and the functioning of the Indian Institutes of Technology (IITs) demonstrate that government control does not necessarily impede excellence. The IIMs themselves flourished for decades under government control due to their autonomy in operational matters.

The amendment aims to restore accountability to democratic institutions, ensuring that public institutions are not exempt from the principles of transparency and governance. While some may object to increased government involvement, the need for checks and balances is paramount to protect the brand and reputation of the IIMs.

Expanding on the Need for Accountability and Governance

The IIMs, being premier management institutes in India, hold a critical role in shaping future leaders and contributing to the nation's development. However, as autonomous bodies, they must strike a balance between academic freedom and accountable governance. The absence of a robust review mechanism allowed certain issues to escalate, leading to conflicts between faculty, alumni, and directors. These issues included disputes over logo changes, architectural heritage, and directorial functioning.

One of the main arguments in favor of the 2023 Bill is the need for an authoritative oversight body—the Visitor—to address the existing governance gaps. The Visitor's role, as proposed in the amendment, will provide a formal mechanism for conducting reviews and inquiries, thereby bringing more transparency and accountability to the system.

Balancing Autonomy and Accountability

While autonomy is essential for academic institutions, it must be balanced with accountability to ensure responsible decision-making. The previous Act's lack of clarity on key matters such as dean appointments contributed to an environment where directors wielded unchecked power. The 2023 Bill seeks to address this imbalance by introducing a Visitor who can take corrective measures when necessary.

In doing so, the government aims to restore confidence in the IIMs, safeguard their brand, and preserve their legacy of excellence. It is crucial to strike a balance between government involvement and institutional autonomy to create a system that fosters academic excellence while ensuring democratic accountability.

Conclusion

The Indian Institutes of Management play a vital role in shaping the nation's future leaders and contributing to economic growth. The 2023 IIM Amendment Bill represents a significant step by the government to address concerns of governance and accountability in the IIM system. By introducing the position of a Visitor and empowering them with oversight authority, the government seeks to strike a balance between autonomy and accountability.

While there may be some apprehensions about increased government involvement, the need for checks and balances to protect the IIMs' brand and reputation cannot be ignored. By taking steps to restore accountability in these premier institutions, the government demonstrates its commitment to fostering academic excellence while upholding democratic principles. As the Bill progresses through Parliament, it will be essential to engage in thoughtful discussions and deliberations to create a framework that ensures the IIMs' continued success and impact on the nation's progress.

Source – The Hindu