Published On: Wed, Apr 6th, 2011

HRD Ministry puts on hold Rs 20-crore IIM seat proposal

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Union Ministry of Human Resource and Development has decided to put on hold a proposal to make membership of managing societies of the Indian Institutes of Management conditional on the payment of “substantial” donations.

The proposal was made by an HRD panel headed by Maruti Udyog chairman RC Bhargava. The government sources have said that the recommendation, “though well meaning, could be misunderstood.” Therefore, government has not accepted the proposal although IIM teachers countered that the government has never publicly rejected the proposal.

IIM faculties across the country have been opposing this proposal, which they argue could lead to the privatisation of the premier B-schools. It is to be noted that HRD Minister Kapil Sibal has clearly stated recently that privatization of premier B-schools won’t happen at any cost.

The key suggestions made by the Bhargava panel are restructuring the IIM societies and inviting private firms to join the society in exchange for a Rs. 20 crore donation. Individuals can join the managing society of an IIM for a donation of Rs. 5 crore while alumni can become members for Rs. 3 crore.

Meanwhile, the ministry sources have argued that according to the memorandum of association (MoA) between IIM Bangalore and the government private parties can become members of the managing society of that B-school for a donation of Rs. 4 lakh.

But, the Bhargava panel’s report suggests that membership be made conditional on donations – potentially ruling out other membership routes – faculty countered. The panel’s recommendation – if accepted – would also extend to all IIMs.

[Source: Hindustan Times]