According to recent reports, the Rajya Sabha has successfully passed the Indian Institutes of Management (Amendment) Bill, 2023. This significant legislative change transfers the management accountability of these institutes to the President of India, thereby enhancing the Centre's authority and potentially diminishing the autonomy of these premier Business-schools. The Bill, which was previously approved by the Lok Sabha, secured passage through a voice vote.

The focal objective of this legislative amendment is to modify the Indian Institutes of Management Act of 2017. Notably, it designates the President of India as the Visitor for each Institute governed by the Act. This development shifts the power dynamics by involving the highest executive authority.

A key change outlined in the Bill is the alteration in the process of appointing Directors for IIMs. Previously, the Director was appointed by the Board of Governors based on recommendations from a Search-cum-Selection Committee. The Bill, however, mandates that the Board must seek prior approval from the Visitor before appointing an Institute Director. The specifics of the Director selection process will be defined by the central government.

Moreover, modifications to the composition of the Search Committee are also proposed. The number of members from eminent fields such as administrators, industrialists, and educationists will be reduced from three to two. Simultaneously, an additional member nominated by the Visitor will be introduced, further reshaping the decision-making structure.

The Bill bestows the Visitor with enhanced authority in the removal and termination of Institute Directors. It necessitates the Board to secure prior approval from the Visitor before removing a Director, and the Visitor is also empowered to terminate a Director's services as deemed appropriate. Furthermore, the Visitor's role is expanded to include the ability to appoint personnel for inquiries and reviews into the Institutes' operations, based on which binding directives can be issued.

Additionally, the Bill outlines the central government's authority to prescribe the conditions and procedures for dissolving or suspending an Institute's Board. If such an event occurs, an interim board will be established by the central government for a duration of six months or until the constitution of a new Board is achieved.

The Bill introduces amendments to the Coordination Forum, where the Chairperson, formerly selected by a Search-cum-Selection Committee, will now be nominated by the Visitor. This new provision makes Chairpersons of all Institutes ex-officio members of the Forum, replacing the previous rotational system.

Lastly, the Bill incorporates a classification change for the National Institute of Industrial Engineering (NITIE), Mumbai, designating it as IIM, Mumbai, thus aligning it more closely with the category of Indian Institutes of Management.

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