New Delhi, Feb. 13: Human resource development minister M.M. Pallam Raju today said the government should have no problems if the IIMs offered a higher package to new directors from their own funds as part of efforts to "attract" the best talents.
The comments came at a media conference where the minister was asked if the Indian Institute of Management, Ahmedabad, was planning to offer a yearly package of Rs 1 crore to the person who succeeds the current director, who is on extension.
"(There is) no such proposal. (But) if you want to attract people… we should let them (the institutes) set the benchmark," Raju said.
IIM directors now get around Rs 20 lakh a year, which includes a basic monthly salary of Rs 80,000.
Two years ago, the HRD ministry had allowed the elite B-Schools to top up the package for faculty from their own resources they generated through tuition fees, executive programmes and consultancy services.
Although the B-school has not officially communicated to the ministry that it was planning to offer a Rs 1-crore package, The Telegraph has learnt that the institute was considering the proposal.
The paper had, on January 15, first reported about IIM-A's plans to offer such a package to its new director. The institute is in the process of appointing a new head as the tenure of the current director, Samir Barua, who is on extension, ended in October.
Higher education secretary Ashok Thakur echoed Raju. "Even today, the faculty of the IIMs, the better ones, earn up to Rs 30-40-50 lakh (per annum) which is comparable to the best universities in the world. So the problem was that none of the faculty people wants to become a director," Thakur said.
"Without the ministry's funds being involved, if they generate their own resources to attract the best director, there should be no harm. If they can give Rs 30-40 (lakh) or 50 lakh as take-home salary to a faculty member, why can't (from the) same pool of resources, the director also be compensated, if they get a world-class director?"
Thakur said the government was in the process of bringing an IIM bill, which, if passed by Parliament, will make the institutes statutory bodies enabling them to award MBA and PhD programmes.
Some of the IIMs, particular IIM Ahmedabad, are against the IIM bill. Their contention is that the postgraduate diploma in management that they offer is widely recognised and carries enough weight.