The prestigious Indian Institutes of Management (IIMs) will soon be able to grant degrees and PhDs to their students instead of Post Graduate Diplomas and Fellow Programmes in Management as the Union Cabinet gave its nod to the IIM Bill 2017.

The 20 IIMs will also be declared as Institutions of National Importance said the bill, which was cleared by the Union Cabinet chaired by Prime Minister Narendra Modi today.

Following the approval by the Cabinet, this much-awaited legislation is expected to be introduced in Parliament in the upcoming Budget session.

"The IIM Bill focuses on complete autonomy, effective administration, more alumni participation and many other areas," Prime Minister Modi tweeted shortly after the decision of the Cabinet was announced.

HRD minister Prakash Javadekar also tweeted that the decision is a "historic one" which gives the IIMs real autonomy and power to grant degrees.

"We trust excellence and quality. This reflects vision of Modi Govt for higher education," Javadekar tweeted.

In an official statement, the government said that the management of these Institutions would be Board driven, with the Chairperson and Director of an Institution which will be selected by the Board of Governors (BoGs).

Provision has also been made for inclusion of women and members from Scheduled Castes and Scheduled Tribes in the Board, the statement added.

It is learnt that a provision making President of India as the Visitor of these Central Institutions was dropped and more powers were given to the Boards.

"The Bill also provides for periodic review of the performance of Institutions by independent agencies, and placing the results of the same on public domain," the statement said referring to provisions which focus on accountability.

"The Annual Report of the Institutions will be placed in the Parliament and CAG will be auditing their accounts," the statement said.

Presently all IIMs are separate autonomous bodies registered under the Societies Act.

"Being societies, IIMs are not authorized to award degrees and, hence, they have been awarding Post Graduate Diploma and Fellow Programme in Management. While these awards are treated as equivalent to MBAs and Ph.D, respectively, the equivalence is not universally acceptable, especially for the Fellow Programme," the statement said.