FLAGGING SEVERAL procedural and regulatory irregularities in the approval of variable pay of Rs 3.2 crore to IIM Rohtak director Dheeraj Sharma, the Comptroller and Auditor General (CAG) has recommended that the Ministry of Education consider establishing a uniform, transparent, and fiscally prudent framework for payment of variable pay to IIM directors.

Context

The CAG in its report stated that the IIM Act, 2017 entitles the institute’s director to variable pay based on performance objectives specified in the regulations. It empowers the board to frame regulations, including those that determine performance objectives for variable pay. The regulations of IIM Rohtak became effective only upon publication in the Official Gazette on October 25, 2021.

Key Findings

The regulations require the board to develop and convey a performance matrix for the director, based on which variable pay will be determined. Additionally, the director is required to recuse himself in all matters involving conflict of interest. Notably, the payment of the variable pay to the IIM Rohtak director covered three years — 2018-19, 2019-20, and 2020-21 — despite the regulations coming into effect only in October 2021.

The CAG pointed out several other irregularities and recommended that IIM Rohtak:

  • Ensure that variable pay and similar payments are made strictly in accordance with regulations effective from the date of notification.
  • Avoid any retrospective application of these payments.