With the government considering a new Bill to make the Indian Institutes of Management answerable to Parliament, India Inc leaders say the time has now come to grant complete autonomy to these institutes and set up an independent regulator to oversee the education sector.

"The IIMs should be granted autonomy and they should not depend on the government for funds," said Rahul Bajaj, Chairman of Bajaj group and a member of Parliament.

"Till these IIMs depend on the government for funds, the government will have the right to take decisions for them," he added.

Apart from imposing a quota on the seats for socially disadvantaged, the Human Resource Development Ministry is planning an Institutes of Management Bill which would follow a similar law made under the Institutes of Technology Act, 1961 under which the IITs operate.

An independent regulator could solve the problem provided the government does not appoint its members and chairman, say corpoate leaders.

"When the government has the power to appoint themembers and the chairman of the regulatory bodies in the country, how can they be called independent?" Bajaj who was also the chairman of IIT Mumbai till last year, asked.

A committee consisting of HRD minister, leader of opposition or a top educationist should appoint the regulator which would oversee the entire education sector, Bajaj suggested.

Bajaj, who favours merit over quotas in IIMs and IITs, said the students should be encouraged to take loans to pay for the IIT, IIM fees instead of the government keeping the  fees low artificially.

"When an IIM student walks out, he gets an offer of Rs 40 lakh to 50 lakh (Rs 4 to 5 million) per annum, they can very well pay back the loans  which would help these institutions to get financial autonomy as well as keep the government at bay," he added.

Though in November last year, the National Knowledge Commission recommended that all regulatory powers of the government agencies in higher education should be vested with an independent regulator, the recommendation has been been put in the cold storage following stiff resistance from the HRD ministry and University Grants Commission.

Other India Inc leaders agree with Bajaj. "We have written to the National Knowledge Commission that the country should set up an independent regulator for the higher education sector to create a level playing field for all the players," said Nandan Nilekani, Co-Chairman designate of  Infosys Technolgies.

With the requirement of qualified people expected to shoot up in the coming years, there is a need to improve public policy for better delivery of education to the people.

"An independent regulator would act as an arbitrator or referee between public and private investment," Nilekani added.