IIM Bill – Important notice for MBA aspirants

Indian Institutes of Management (IIM) Bill has been approved by the Lok Sabha. Find out the key take away from the bill and how it will benefit various parties involved. The Bill will include information on the IIM Board’s power.

Created On: Sep 3, 2018 16:12 IST
Modified On: Sep 25, 2018 14:38 IST
IIM Bill – Important notice for MBA aspirants
IIM Bill – Important notice for MBA aspirants

A lot has been heard about the IIM Bill for the premium management institutes of India. It is important for MBA aspirants to know about this bill as it holds relevant information that they need to know before appearing for CAT exam. So, what makes the bill so important and special? Let’s find out about the role of government and other major factors in passing the bill.

What is IIM Bill?

The IIM Bill provides statutory powers to the management institutions (primarily IIMs) that are currently operational to appoint directors, faculty members, and grants them powers to award degrees instead of post graduate diplomas to the candidates.

Why there is a huge fuss in passing the Bill?

The Bill further has provisions for the appointment of members of the board of governors (BoG) in each of the 20 IIMs through a transparent process that will limit the role of HRD Minister. In addition, it sought to declare the IIMs as institutes of national importance and abolish the post of visitor. At present, the President (the first citizen of nation) is the ‘visitor’ of the IIMs.

IIM Bill: 5 provisions approved by Union Cabinet

What are the biggest changes recommended in IIM Bill?

After the Bill is passed in the Parliament, the Board will be the principal executive body of each institute and will also gain a major say in the management of the institute. Major changes that are recommended in the Bill are:


The Director of each IIM will be appointed via a search-cum-selection panel. Once the bill becomes an act, the board will not have an obligation to seek the human resource development ministry’s approval.

In addition, the accounts of IIMs will be audited by the Comptroller and Auditor General of India. All rules and regulations framed either by the central government or the IIM Boards will need to be tabled in parliament.

IIMs to get a new name soon as per the IIM Bill

How IIM Bill will impact students?

The Bill will also have an implication on the students as well. At present the institute award post graduate diplomas to the students graduating from the institutes.

There is a provision in the IIM Bill which states that the students will be awarded post graduate degrees instead of diplomas. At present the PG diploma awarded by the management institutes is considered equivalent to the degree, but after the Bill is passed the students will carry a tag of degree than diploma.

How will the Bill impact the faculty members of IIM?

The Bill carries a provision on faculty reservation as well. The proposed law states that IIMs will have to provide reservation for SC/ST and OBC students, it has a clause which says that IIMs shall try to recruit teachers from the weaker sections of society. On the other hand, institutes say they will set aside a chunk of faculty positions for SC/ST and OBC candidates only once the government issues directions in writing.

How will IIM Bill affect other top B-schools of India?

IIM has been awarding postgraduate diploma in management (PGDM) to the students where as other big private B-schools such as XLRI-Jamshedpur, BIMTECH in Greater Noida and SP Jain Institute of Management and Research in Mumbai fear that with IIMs not offering PGDM, their own PG diplomas will suffer in market value and put them at a win-lose situation.  

The Education Promotion Society of India (EPSI) had also sent a petition to the HRD Ministry on behalf of private management schools, requesting the government to allow PGDM institutions to also offer MBA degrees. But since a private educational institution can award degrees only if it becomes either a state university or a deemed university or gets affiliated to a state university, the government has asked them to explore these options rather than granting them the autonomy to give away Post-graduate degree to the MBA graduates.

Why IIM Bill is taking time in becoming a Law?

IIM draft Bill was first made public in June 2015. At that time Smriti Irani was HRD Minister, and the IIMs objected to the ‘excessive government control’ in their operations. IIMs, especially IIM-Ahmedabad, attacked two clauses of the draft Bill, mentioning it “reduced the institutes to government departments”. Under the two clauses [3(k) and 36(1)], the IIMs would have had to seek the government’s approval for every decision, including fee structure, admission criteria, formation of academic departments, salary of the staff and constitution of BoG.

These powers are currently held by the IIM BoGs.

The Bill faced challenges in getting drafted at the initial stages and later on the demand mentioned in the Bill reduces the government interference in the operations of the management institutes.

Pick the right college for your MBA

List of MBA Colleges in India

List of Top MBA Colleges in Ludhiana

List of Best MBA Colleges in Shimla

Related Categories