The first batch of B.Tech students will pass out in the next couple of months from six new IITs but they will not get their degrees unless Parliament passes an Amendment Bill. M.Tech students who completed their course in IIT Hyderabad last year have not yet been awarded their degrees. The Institute of Technology (Amendment) Bill, 2010 is listed for consideration and passing in the Rajya Sabha on April 30, 2012 along with the National Institutes of Technology (Amendment) Bill, 2010. Both Bills were passed in the Lok Sabha in 2011. Both Bills confer the status of institutions of national importance to a number of new institutions, which implies that they have the power to award degrees (other technical institutions have to be affiliated with a university to be able to award degrees). These institutions cannot award degrees until Rajya Sabha also passes the Bill, the President gives assent and the central government brings it into effect through a notification. Power to grant degrees The Ministry of HRD established six new Indian Institutes Technology (IITs) in 2008 and two in 2009. It also established five new Indian Institutes of Science Education and Research (IISERs). However, they are still awaiting for the power to be recognised as degree granting institutions. Entry 64 of the Union List states that only Parliament can declare an institution to be an institution of national importance (see here and here). Also, the University Grants Commission Act, 1956 states that the right to confer degrees can be exercised only by a university, deemed university or any institution specially empowered by an Act of Parliament to do so. According to news reports, students of the new IISERs who passed out in 2011 have not received their degrees because of the legislative delay. Similar problems were reported by students in IIT-Benaras Hindu University. The students of the new IITs, which were set up in 2008 would be passing out this year. It is likely that they would face similar problems. In fact, IIT-Hyderabad is already in the news for not being able to award degree to its Masters students. Highlights of the Bills The Institute of Technology (Amendment) Bill, 2010 amends the Institutes of Technology Act, 1961, which declares certain Institutes of Technology to be institutions of national importance by adding eight new Indian Institutes of Technology (IITs) in Bhubaneshwar, Gandhinagar, Hyderabad, Indore, Jodhpur, Mandi, Patna, Ropar. It also seeks to integrate the Institute of Technology, Banaras Hindu University (BHU) within the ambit of the Act. All these institutions shall be declared as institutions of national importance (see here for a Bill Summary). The Bill was referred to the Standing Committee on HRD, which raised a few issues with regard to lack of clarity about the zone in which IIT-BHU shall be operating, the need to preserve the autonomy of the IITs and the need to fulfil qualitative parameters before the new IITs could transform into institutes of national importance (see here for the Standing Committee Report and a Summary). The National Institutes of Technology (Amendment) Bill, 2010 amends the National Institutes of Technology Act, 2007 to add a schedule of five Indian Institutes of Science Education and Research (IISER) (established in Kolkata, Pune, Mohali, Bhopal and Thiruvananthapuram). These institutions shall be declared to be institutions of national importance. Currently, there are 20 institutions listed as institutions of national importance under the 2007 Act (see here for a Bill Summary). The Standing Committee Report on the Bill made a few recommendations: (a) the composition of the Board of Governors should be made more expert specific in with the mandate of IISERs; (b) IISER Council should have less number of Secretaries, and (c) details of the inter-disciplinary knowledge regime should strive toward flexibility and freedom in research (see here for the Standing Committee Report and a Summary).
Last month, the Pension Fund Regulatory and Development Authority (PFRDA) issued revised guidelines for the registration of the Pension Fund Managers (PFMs). These guidelines are for the PFMs to manage the National Pension System (NPS) in the non-governmental and private sector. See here. The NPS was implemented in 2004 for all government employees and later extended to the private sector in 2009. The guidelines bring about the following changes in the NPS:
Although NPS was made accessible on a voluntary basis to non-government employees and those working in the private sector since 2009, the subscription to the schemes under NPS was lower than expected. In August 2010, a committee was set up under the chairmanship of Mr. G.N. Bajpai to review the implementation of NPS in the informal sector. The Committee noted that since NPS was opened to the general public there were only 50,000 private sector subscribers until May 2011. According to the Committee, the low subscription was due to the low-to-negligible distribution incentive to the PFMs to distribute the different schemes to the subscribers to invest their funds. The Committee thus recommended that PFRDA should consider revising the structure of the NPS so as to increase subscription. It suggested making the fee structure dynamic for PFMs. The Committee had also suggested that there should be some revision in the bidding as well as the selection process for the PFMs to increase competition and thereby incentivise them to distribute the schemes. These changes, as suggested by the Bajpai Committee and now notified by the PFRDA, are different from the original design of the NPS. The Old Age Social and Income Security (OASIS) Report of 2000, which had initially suggested the establishment of pension system for the unorganised sector in the country, had recommended a low-cost structure for the pension system. The Report had stated that the choice of PFMs should be based on a bidding process where the lowest bidder should be made a PFM under the NPS. The rationale for the auction base for the PFMs was that it would provide a system to the subscribers whereby they could make investments for their old age by paying a minimal fee. A set uniform fee was meant to eliminate the large marketing expenses which would ultimately get passed on to the subscibers. In addition, the intent behind keeping the fund managers from the distribution and marketing of the schemes was to prevent any mis-selling (misleading an investor about the characteristics of a product) that may happen. Recent newspaper reports have raised doubt if these new rules would help in increasing the penetration of the NPS in the markets. However, the chairman of PFRDA, Mr. Yogesh Agarwal, in a recent interview explained that it was important to bring about changes in the structure of the NPS. According to him a scheme which was mandatory for the government sector could not be expected to perform as well in the private sector (where it is voluntary) without any changes made to its structure. He also stated that the NPS should be able to compete with other financial products such as insurance and mutual funds in the market. See here for the PRS Legislative Brief on the PFRDA Bill, 2011. Notes: The seven PFMs are LIC Pension Fund Ltd., UTI Retirement Solutions Ltd., SBI Pension Funds Pvt. Ltd., IDFC Pension Fund Management Co. Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension funds Ltd., and Reliance Capital Pension Fund Ltd..
