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IIMs object to fee clause in draft rules under new Act

In addition to the clause on fee, some of the older IIMs have also objected to the provision that mandates the institutes to sign an annual Memorandum of Understanding (MoU) with the government on performance parameters, student intake, expansion of institute..

Government teachers national award The HRD Ministry had shared a copy of the draft rules with the IIM chairpersons for their feedback last week.

The Indian Institutes of Management (IIMs) have expressed concern to the government about a provision in the draft rules, under the new IIM Act, that seeks to put a condition on the tuition fee charged by the 20 elite business schools.

The HRD Ministry shared a copy of the draft rules with the IIM chairpersons for their feedback last week.

The Indian Express has learnt that some of the older institutes have objected to the clause that mandates the Board of Governors (BoG) to “ensure that the fee charged from the students shall be commensurate with the overall expenditure for maintenance and expansion of the institute”.

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According to sources in the IIM community, the older institutes are more uncomfortable with this provision since they do not take any funds from the government for maintenance and expenditure.

“For the IIMs, at least half of their internal resources are generated from tuition fee. Since the older institutes (IIMs in Ahmedabad, Bengaluru, Kolkata, Lucknow and Kozhikode) do not take any money from the ministry, this is our protection against any rainy day. The clause is ambiguous. Who decides what’s commensurate and what’s adequate? This can, eventually, become a bone of contention between the institutes and the government,” said a source who did not want to be identified.

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“The (IIM) Act explicitly gives the Board the right to fix fee. Imposing any condition on that freedom through the rules is not desirable. If the government has given us the autonomy, then they should trust us with it. We are not going to go against the interest of the students,” said another IIM source on condition of anonymity.

Unlike the IITs, education at the IIMs is not subsidised by the government. The premier business schools charge anything between Rs 10 lakh and Rs 22 lakh. The fee for the two-year postgraduate programme at IIM-Ahmedabad and IIM-Bangalore is about Rs 21 lakh. While the institutes in Indore and Lucknow charge Rs 14 lakh for the same, the postgraduate programmes at IIM-Calcutta and IIM-Kozhikode cost Rs 20 lakh and Rs 17.5 lakh respectively.
Reacting to these concerns, a senior official of the ministry said, “There is absolutely no cap on the tuition fee. All we are saying is that the fee should not be increased arbitrarily. You also have to look at public interest, which is why we have just said that the fee charged should be commensurate with their expenditure and future expansion plans.”

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In addition to the clause on fee, some of the older IIMs have also objected to the provision that mandates the institutes to sign an annual Memorandum of Understanding (MoU) with the government on performance parameters, student intake, expansion of institute and output targets.

“While the law is forward-looking and frees the institutes of government control, this provision ensures that the government still has a say in our working. Moreover, the General Financial Rules make the signing of MoU mandatory for institutes taking more than Rs 5 crore from the government. The MoU should not be applicable to the older IIMs since they don’t take funds from the government,” said another source in the IIM community.

The IIM Act, which came into effect on January 31, grants statutory powers to all 20 IIMs, including for appointment of directors and chairpersons and Board members. With this law, the institutes can also award degrees, instead of diplomas, for their postgraduate programmes.
The rules, under the IIM Act, will define finer details such as the procedure for appointment and removal of an institute’s chairperson and director, their powers, and the functions of the BoG. The HRD Ministry had set up an eight-member panel, headed by IIM-Sirmaur chairperson and industrialist Ajay Shriram, to provide suggestions for making rules.

The draft document circulated to the IIM chairpersons is based on this committee’s report. Here are some of the other provisions of the draft rules on which the government has sought feedback:

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* The appointment process of chairperson should begin three months before the term of the incumbent ends and end a month before the incumbent retires. If a successor is not found within this time frame, the HRD Ministry will appoint a Board member as the acting chairperson.
* An IIM chairperson’s term will automatically end once he/ she turns 74 years or on the completion of four years.
* A chairperson can be removed only through consensus of the Board of Governors.
* Neither the chairman nor any Board member should have a conflict of interest with the institute. If a conflict of interest is discovered later, then the concerned person will have to resign.
* The government has the power to issue directions to the IIMs if they are found to be acting in contravention of the Act. Such directions shall be binding.
* No person shall be director of an IIM for over two terms. The retirement age of directors has been extended from 65 to 70 years.
* The director can only be removed when the Board approves such action with two-third majority.
* 13 new IIMs can co-opt alumni of older IIMs as board members.
* In case of any doubts regarding any provisions of the rules, IIMs may seek clarification from the government and the clarification provided shall be final.

An award-winning journalist with 17 years of experience, Ritika Chopra is the Chief of the National Bureau (Govt) and National Education Editor with The Indian Express in New Delhi. In her present role, she oversees the newspaper's coverage of government/policy and education. She also closely tracks the Union Government, focusing on the politically-sensitive Election Commission of India and the Education Ministry. This includes investigative stories, many of which have forced the government to respond. Ritika joined The Indian Express newspaper in 2015. Previously, she was part of the political bureau at The Economic Times, India’s largest financial daily. She began her career with the Hindustan Times in Kolkata — her birthplace — in 2006 as an intern, moving to Delhi in 2007. Since then, she has been reporting from the Capital on politics, education, social sectors, and the Election Commission of India. ... Read More

First uploaded on: 21-06-2018 at 04:13 IST
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