IIM Bill or Management Education Bill? Govt must create level playing field in management education

The government should draft a ‘Management Education Bill’ rather than an ‘IIM Bill’

Due to the vast customer base, businesses across the globe are eyeing the Indian market and are keen to start operations here. A large number of business initiatives have also been launched by the government recently in its endeavour to not only make India a manufacturing hub, but also to make economic growth more inclusive. These forces have increased the demand for professional managers manifold, making management education more important than ever. In India, management education is imparted by varied players like universities, autonomous institutes, affiliated and unaffiliated institutes, besides open universities providing management education through distance learning mode. Indian Institutes of Management (IIMs) are considered institutes of national importance.

The HRD ministry has put up a draft Bill seeking to form a ‘coordination forum’ for the 19 IIMs across the country, and a debate has been sparked over the content of the Bill. It is being led by three major players in management education —the old reputed IIMs (IIM Ahmedabad, IIM Bangalore and IIM Calcutta), newer IIMs and private institutes.

The draft Bill proposes to allow the IIMs to grant degrees instead of diplomas. As a result, programmes offered by the IIMs would be called MBA (in place of PGDM) and PhD (in place of fellowship). This proposal is being appreciated by the new IIMs as they feel that granting of a degree would help build their brand and would make their courses more attractive.

On the other hand, the older IIMs are opposing this move as they believe that they already have an excellent brand due to better quality and, thus, granting of a degree or diploma has no relevance for them. At present, the IIMs enjoy freedom regarding appointment of chairpersons, directors and faculty members, fixing of fees and remuneration, changes in curriculum, and decisions on the institute’s infrastructure. The passing of the IIM Act will snatch away this freedom by making all these subject to the approval of the HRD ministry, in addition to remaining under the Right to Information (RTI) Act and audit by the Comptroller and Auditor General India.

At the same time, the private institutes are also opposing the Bill since they are the worst hit because such a move would likely have an adverse effect on their popularity due to inability to grant degrees and may even put their existence in jeopardy. Some reputed private management institutes rank above the newer IIMs. They have quality infrastructure, admirable course curriculum and faculty, affordable fee structure and location, along with outstanding track record and remarkable placements. With the newer IIMs being able to grant MBA degrees instead of diplomas, it is probable that students will make their preferences based on the nature of certification rather than institute rankings. The courses run by private institutes will lose their sheen once the IIMs begin to award degrees.

The arguments put forth by the older IIMs (A, B and C) appear untenable for the simple fact that if a universal policy is being framed for the IIMs, then all ought to be put under the same umbrella in spite of their market standing or brand. However, this would change the entire game in favour of the newer IIMs against private institutes offering quality management education, jeopardising the credibility of their PGDM programmes. Allowing the IIMs to grant degrees would compromise the position of these institutions. It is strongly felt that there must be a level-playing field for everyone. In fact, the government should draft a ‘Management Education Bill’ rather than an ‘IIM Bill’ to approve all management institutes, be it government, autonomous or private purely on their merit. The future agenda of management education ought to focus on reorienting itself to meet the increasing demand for professional managers.

The author is professor, Fore School of Management, New Delhi

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First published on: 16-05-2016 at 05:27:23 am