Indian Institutes of Management (Amendment) Bill, 2023

Context- Parliament has passed the Indian Institutes of Management (Amendment) Bill, 2023, which seeks to amend the  Indian Institutes of Management (IIM) Act.

Key Highlights 

• The Bill seeks to amend the Indian Institutes of Management Act, 2017. 
• India’s Institutes of Management Act  2017, which significantly expanded the autonomy of IIMs, contains an important clause. 
• It requires that the Board of Governors (BoG) of the IIMs  commission an independent evaluation of the institutes at least  every three years and publish a report. 
• However, only a few of the 21 IIMs have done so.
• A dangerous management vacuum has been created in the IIM system over the years since the government relinquished control of these institutes.  
• The IIM Act 0f 2017 created a situation where the IIM Director lacked substantive checks and balances. 

Basic provisions of the bill 

• President of India as Visitor: It appoints the President of India as  Visitor in all institutes covered by the Act.  
• Appointment of IIM Director: The bill authorizes the government to obtain  prior consent of the visitor before appointing the director of the institute. 
  • The central government decides on the selection procedure of the director. 
  • Currently, the IIM Director  is appointed by the Board of Trustees based on the recommendations of the Search-cum-Selection Committee. 
• Composition of the search committee: The search committee currently consists of the board and three members from among prominent administrators, industrialists and educators. 
  • The bill reduces those three members to two and adds one more member to be appointed by the Visitor. 
• Dismissal of a director: Before dismissing a director, the board needs the prior consent of the Visitor. 
  • It also gives the Visitor the right to terminate the Director’s services  as  prescribed. 
  • The draft also states that the Visitor appoints the president. 
• Inquiries against IIMs: The Bill proposes a new procedure  against IIMs. 
  • This gives the visitor the right to request. 
  • The Visitor may appoint persons to review the work of any Institute and make inquiries into its activities. 
  • Based on the report of such investigations, the Visitor may issue  binding instructions to the Institute. 
• Conditions for termination of the board: The draft law provides that the state can determine the conditions and procedure for the termination or recall of the board of directors of the institute. 
  • If the government is dissolved or dismissed, the country forms an interim government for six months or until a new government is formed. 
• Coordinating Forum: At present, there is a statutory coordinating forum for all the institutes whose chairman is chosen by the Selection Committee. 
  • According to the bill, the president is appointed by the Visitor.  

About IIMs 

• Indian Institutes of Management are the country’s premier institutions providing the best management education in globally comparable management learning processes. 
• IIMs are recognized as world-class management institutions and centers of excellence and have brought laurels to the country. 
• All IIMs are separate independent institutions registered under the Companies Act. 
• As the IIMs are societies, they do not have the right to award degrees and hence they issued a diploma and management programme.

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