DNA Edit: Giving IIMs the autonomy they demanded

The Cabinet approval for the Bill granting greater autonomy to the Indian Institute of Management is a step in the right direction. For years, there has been a robust debate about the need to make the IIMs, the premier management institutions in the country, autonomous.

The government kept a tight check on the IIMs, which have done yeoman service for feeding the private sector’s demand for managers, executives and entrepreneurs. The government controls on fee revision, constitution of boards, and appointment of chairpersons and directors has been blamed for retarding the growth of the IIMs into campuses that can rival the top global business schools. The proposed bill will now allow the IIMs to decide board composition, chairpersons, directors and fees structure.  More importantly, it will allow IIMs to confer MBA degrees on its students as against the post-graduate diplomas that are now on offer. By offering degrees, IIMs will be in a better position to woo foreign students and improves the prospects of Indian students in higher education and employment opportunities. The fees at IIM for the two-year postgraduate management programme was Rs 19.5 lakh, a reflection of how the market drives costs even at a government institution.

So it is only in the fitness of things that the government stopped interfering in the administration of IIMs. What the IIMs must do is to expand its fee waiver programme to enable students who secure admission through reservation and those from economically backward households to secure access to the vaunted institution.

IIM autonomy was one of the reasons that prompted Prime Minister Narendra Modi to ease out Smriti Irani from the prestigious Human Resources Development portfolio. Under Irani, the HRD ministry was not comfortable with the bill’s provision to take away the ministry’s powers to hold the IIM accountable on administrative and financial matters. However, Irani erred in not understanding that the Prime Minister was keen on seeing the reform measure through. Earlier, the IIMs had publicly opposed a previous version of the Bill because in the guise of autonomy it would only have expanded the HRD ministry’s control over the management institutions. Now the Bill must pass Parliament and face the bigger test of execution.

Often, governments, despite best intentions, cannot resist intervening in institutions they fund. The Opposition could also turn the tables on the government by terming this another example of an anti-poor, anti-middle class legislation by raising the bogie of unregulated fee hikes. In the end, the IIMs are a rare Indian success story in higher education and a key facilitator of India’s market economy. It should not become a victim to myopic politics.