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HRD panel recommends tighter government control on IIMs

The IIM Review Committee report submitted to the Ministry of Human Resource Development on Friday is learnt to have recommended a series of measures...

Written by Anubhutivishnoi | New Delhi |
October 19, 2008 1:14:48 am

The IIM Review Committee report submitted to the Ministry of Human Resource Development on Friday is learnt to have recommended a series of measures that will substantially tighten government control over the Indian Institutes of Management (IIMs) and their Board of Governors. The 40-page report, packed with over 20 recommendations, is said to have made a case for stronger government role on the Boards of IIMs, stating clearly that the institutes cannot expect to become fully independent of the government.

“We had given the report earlier to the HRD Ministry but we made a formal submission to the minister on Friday. The Ministry is now studying it. Several recommendations have been made in the report and it is likely to be put up on the HRD Ministry’s website soon,” said R.C. Bhargava, former chairman of Maruti Udyog Ltd, who headed the three-member IIM Review Committee. The other two members of the committee are Ajit Balakrishnan, CEO of Rediff.com and chairman of IIM Calcutta’s Board of Governors; and Anusua Basu, retired Deputy CAG. The Government had constituted the IIM Review Committee after a gap of 15 years.

A key recommendation of the committee is the creation of a 15-member pan-IIM Board and reconstitution of all existing boards. Calling the existing 24-25 member IIM Board of Governors (BoGs) rather unwieldy, the committee has apparently suggested an 11-member Board for each IIM. Of these members, six will be independent professionals while the other five will include a nominee of the Centre, State Government, faculty member and chairman and director of the institute. The committee has also recommended that a special committee headed by the Secretary of the HRD Ministry and three other independent professionals make the initial selections to the BoGs—an exercise that defeats the autonomy of the IIM boards. It adds that at a later stage, the boards can fill the vacancies on their own.

Interestingly, while the report says that the IIMs cannot expect to be fully independent of the government since they were set up by it, it admits that the government’s involvement can only be limited.

The IIMs, meanwhile, have been strongly resisting the recommendations. They feel a pan-IIM structure will only ‘cannibalise’ and ‘duplicate’ the functions and powers of each institute’s board. Downsizing the board of each institute will also mean it will become less representative. The idea of the HRD Ministry Secretary directly appointing BoG members goes against all corporate standards of practice, they said.

“A pan-IIM Board just doesn’t make sense when each institute has its own board. In fact, the older IIMs have a case for autonomy and have proven their credentials. They have a right to be freed of government control. To suggest that the HRD Ministry should decide the constitution of the IIM Board of Governors is shocking. We had earlier expressed our inability in helping the new IIMs (as suggested in the report) because of our limited faculty and resources. We had instead asked the Ministry to allow us to set up branches which they didn’t,” said an IIM director on condition of anonymity.

Though the report is said to have largely steered clear of the issue of fee hike, it has touched on the subject of revenue generation. The committee report is likely to ask that IIMs should go slow on income generating activities like consultancies and executive training programmes. The recommendation, if accepted and implemented by the Government, will spell bad news for the IIMs as this additional income is what helps draw and retain quality faculty to the premier institutes. The committee is also learnt to have suggested that IIMs operating for five years or more should only be making a ‘small operating surplus’ to be used towards infrastructure building and strengthening of scholarship funds. The Review Committee is also said to have suggested that the annual intake in Post Graduate Programmes be increased to 750.

A more welcome recommendation of the committee, based on western models, is to separate academic and administrative functions of IIMs to enable faculty to devote more time to research and teaching.

What the panel says

A 15-member pan-IIM Board with five government nominees and chairman nominated by the PM

Re-constitution of the Board of Governors (BoG), downsizing it from current 24-25 members to 11 

A committee headed by Secretary, HRD Ministry, and with three independent professionals to make initial selections of BoGs

Faculty shortage to be met with appointments on contract basis, increased output of PhDs

All IIMs to generate only a small operating surplus. Fee for courses to be fixed keeping in mind small surplus and other incomes

Increase annual PGP intake to 750

IIMs to use corpus raised over base level of Rs 50 crore without any government approval/control

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