IIM Act: Declaring IIMs as Institutions of National Importance

The Union HRD Minister Prakash Javadekar Introduced IIM Act 2017 on December 19, 2017, and it got approval from Rajya Sabha and the Lok Sabha on February 9, 2017. The IIM Act 2017 got presidential assent on December 31.

10,000+ students from all the 20 IIMs will benefit from receiving an MBA degree rather than a Post Graduate Diploma in Management (PGDM) or a Post Graduate Diploma in Project Management (PGPM).

The Indian Institute of Management Act,2017

IIM Act is an act to designate certain institutes of management as institutions of national importance to empower them to achieve standards of global excellence in management, management research, and related areas of knowledge and to deliver for certain other matters connected or incidental to it.

Powers and functions of the board

Under section 11 of the IIM act:

• The Board of each Institute shall be responsible for the general supervision, direction, and control of the Institute’s affairs. It shall have the authority to establish, amend, modify, or repeal the regulations governing the Institute’s affairs to further its purposes, as outlined in section 6.
• The board shall have the following powers, without limiting the provisions of subsection (1), namely:
  • To make decisions on matters of policy about the administration and operation of the Institute.
  • Review and approve the Institute’s annual budget estimates and determine the funding sources for the plan’s implementation.
  • Create departments, faculties, or schools of study, launch programmes or courses of study at the Institute, and establish centres of management studies.
  • Award honorary degrees in a way that is possibly regulated.
  • Bestow honorary awards and other distinctions.
  • Establish regulations that specify the number of these positions, their salaries, and the responsibilities of the academic, administrative, technical, and other employees.
  • Establish management study centres and related facilities outside of India as per recommendations established from time to time by the Central Government and in compliance with the laws currently in effect in that foreign nation.
  • To establish by regulations the fees charged for courses of study and examinations at the Institute.
  • To establish by regulations the method of the department of teaching formation, institution of fellowships, scholarships, exhibitions, medals, and prizes.
  • Define through laws the construction and upkeep of buildings.
  • Authenticate the board’s orders and decisions like the quorum requirements for meetings of the Board, the Academic Council, or any Committee;
  • Defining the Institute’s financial accountability through rules
• The board may, by rules, assign to the Director those Board powers and duties as it deems appropriate.
• The board shall conduct an annual review of the Director’s performance in light of the Institute’s accomplishments of its objectives. However, such review shall also cover faculty members’ performance, subject to the parameters, frequency, and guidelines that the board may determine.
• The board shall evaluate and review the Institutes’s performance, including its faculty, on the parameters of long-term strategy and rolling plans of the Institute; within three years of the date of incorporation and at least once every three years. The report of such review shall be made available to the public.
• The independent agency or group of experts referred to in subsection (5) shall have the credentials, experience, and selection method regulations may prescribe.
• The board must send to the Central Government the evaluation and review report required by subsection (5), along with a report on the subsequent actions.
• The Chairperson, in consultation with the Director, may issue any orders that may be necessary, recording the reasons for his opinion: Provided, however, that such orders shall be submitted for ratification by the board at the following meeting when the situation, in the opinion of the Chairperson or the Director, is so urgent that he must make an immediate decision in the interest of the Institute.
• The board must answer to the Central Government in exercising its authority and performing its duties under this Act.

Term of office for vacancies and allowances for board members

• The Chairperson’s term of office, or any other Board member who is not an ex officio member, shall be for a term of four years beginning on the date of his appointment or nomination.
• A member’s term of office under S.2(11)(e) shall be two years from his nomination date.
• As long as an ex officio member holds the position that makes him a board member, his term of office will stay in effect.
• A board member who misses three consecutive meetings without the Chairperson’s approval and is not a nominee of the Central or State Governments forfeits their membership in the board.
• Section 10 must be followed when filling a member’s ad hoc vacancy.
• The term of office of a member appointed to fulfill a temporary vacancy shall run concurrently with the term of the member for whom the nomination was made.
• For attending Board meetings, board members are entitled to reimbursements that may be outlined in the regulations.
• The board must convene once every three months.

Role of the academic council

Under section 14 of the IIM act:

• The academic council shall be the primary academic body of each Institute and shall be composed of the following individuals:
  • The Director of the Institute, who shall serve as the Academic Council’s Chairperson
  • The Deans oversee academics, research, student affairs, and other Institute-related duties.
  • The Chairperson of Programmes, the Heads or Coordinators of the Institute’s Faculties or Schools, Centers or Departments; and all full-time faculty
• An ex officio member’s term of office will remain in effect for as long as he retains the position for which he is a member.
• A member nominated shall serve a two-year term beginning on the date of his nomination.

Power and functions of the academic council

• The Academic Council is responsible for carrying out the following duties:
  • defining the requirements and procedure for enrollment in the Institute’s courses or programmes of study;
  • defining the academic content of these programmes and courses of study and initiating changes; and
  • defining the academic calendar, the rules for conducting examinations, and recommending the award of degrees, diplomas, and other academic distinctions or titles.
• The Academic Council will exercise any additional authority granted to it by this Act, the regulations, or the Board and carry out any additional duties.

Conclusion

The Indian Institutes of Management (IIM) Act of 2017 was created to strengthen the institutions and give them academic autonomy. Since its enactment, the law has permitted institutions to choose their directors, chairpersons, and board members. Additionally, institutions are authorised to provide degrees in place of the diplomas previously given for postgraduate programmes. The act declared these institutions national importance and permitted them to grant degrees and make other significant administrative reforms.

The IIM Act 2017 benefitted students in all 20 IIMs as they are permitted to grant MBA degrees to their students instead of PGP/PGDM diplomas, which limits the prospects of their student’s higher education and access to global professional opportunities.