The passage of the legislation will also prove beneficial for students who wish to pursue post graduation and help the institute promote quality and excellence in design education.
Transforming the institute into a corporate body with the legal status of an Institute is the other objective of the Bill.
Commerce Minister Nirmala Sitaraman, who piloted the legislation, said "this institute is going to stand for excellence and will award degrees, post graduate degrees, MPhil and PhD programmes".
The Minister said the faculty at the institute would be of high quality and that the institute would continue to follow the reservation policy without any dilution.
The institute will also enjoy the autonomy to increase the seat strength, she said.