UNIT-1 PUBLIC ADMINISTRATION - MEANING,

NATURE, SCOPE AND IMPORTANCE

Structure

1.0 Learning Outcome

1.1 Introduction
1.2 What is Administration?
1.3 Administration, Organisation and Management
1.4 Defining Public Administration
1.5 Nature of Public Administration
1.6 Scope of Public Administration
1.6.1 Scope of Public Administration as an Activity
1.6.2 Scope of Public Administration as a Discipline
1.7 Public and Private Administration
1.7.1 Distinction between Public and Private Administration
1.7.2 Similarities between Public and Private Administration
1.8 Importance of Public Administration
1.8.1 Importance of Public Administration as Specialised
Subject of Study
1.8.2 Importance of Public Administration as an Activity
1.9 Role of Public Administration under Liberalisation, Privatisation
and Globalisation (LPG)
1.10 Conclusion
1.11 Key Concepts
1.12 References and Further Reading
1.13 Activities

1.0 LEARNING OUTCOMES

After going through this Unit, you should be able to:

• define Administration and Public Administration
• describe the nature of Public Administration
• explain the scope of Public Administration
• distinguish between Private and Public Administration
• analyse the Role of Public Administration vis-à-vis
Liberalisation, Privatisation and Globalisation (LPG)

1.1 INTRODUCTION

Administration as an activity is as old as society itself. But as an area of

study it originated, with the publication of Wilson’s essay on study of
Administration in 1887. As a process, administration occurs in both
public and private organisations. It occurs in such diverse institution as
settings as a business firm, labour unions, religious or charitable
organisations, educational institutions, etc. Its nature is affected by the

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sphere with which it is concerned. Administration is commonly divided
into two types, Public and Private Administration. As an aspect of
government activity it has existed since the emergence of political
system(s). While public administration relates to the activities carried
out by government, private administration refers to the management of
private business enterprises.

It is important to understand the functioning of administration for on

this lies the understanding of the government. In this Unit an effort has
been made to bring the concept of administration, public administration
in particular, closer to you. This understanding will take you through the
entire course of Public Administration. In what follows, we will
examine the meaning, nature and scope of public administration.

1.2 WHAT IS ADMINISTRATION?

The word ‘administer’ is derived from the Latin word administere,

which means to care for or to look after people, to manage affairs.
Administration may be defined as “group activity which involves
cooperation and coordination for the purpose of achieving desired goals
or objectives”.

Broadly speaking, the term administration appears to bear at least four

different meanings or different senses depending upon the context in
which it is used:

(1) As a Discipline: The name of a branch of learning or intellectual

discipline as taught and studied in colleges and universities.

(2) As a Vocation: Type of work/trade or profession/occupation,

especially one that involves knowledge and training in a branch
of advance learning.

(3) As a Process: The sum total of activities undertaken to

implement Public Policy or policies to produce some services or
goods.

(4) As a Synonym for 'word' Executive or Government: Such other

body of persons in supreme charge of affairs, for example,
Manmohan Singh Administration, Bush Administration, etc.

Noted below are definitions by a few famous writers.

E.N. Gladden

“Administration is a long and slightly pompous word, but it has a

humble meaning, for it means to care for or look after people, to

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manage affairs…. is determined action taken in pursuit of conscious
purpose”.

Brooks Adams

“Administration is the capacity of coordinating many, and often

conflicting, social energies in a single organism, so adroitly that they
shall operate as a unity.

Felix A. Nigro

“Administration is the organisation and use of men and materials to

accomplish a purpose”.

J.M. Pfiffner and R. Presthus

“Administration is the organisation and direction of human and material

resources to achieve desired ends”.

L.D. White

“The art of administration is the direction, co-ordination and control of

many persons to achieve some purpose or objective”.

Luther Gullick

“Administration has to do with getting things done, with the

accomplishment of defined objectives”.

F.M. Marx

“Administration is determined action taken in pursuit of a conscious

purpose. It is the systematic ordering of affairs and the calculated use
of resources, aimed at making those things happen which one wants to
happen and foretelling everything to the country”.

Herbert Simon, D.W. Smithburg and V.A. Thompson

“In its broadest sense, the administration can be defined as the activities
of group cooperating to accomplish common goals.”

A brief analysis of the definitions listed above reveals that

administration comprises two essentials, namely (1) cooperative effort,
and (2) pursuit of common objectives. One does not find any
administration if there is only a common purpose without a collective
effort or vice-versa. Administration is also called a ‘technology of
social relationships’. Thus, administration is a process common to all

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group effort, public or private, civil or military, large scale or small
scale. It is process at work in a department store, a bank, a university, a
high school, a railroad, a hospital, a hotel or a local government.

1.3 ADMINISTRATION, ORGANISATION AND

MANAGEMENT

Before we discuss about the meaning, definition, nature, scope and

importance of public administration we will try to know what is
administration, organisation and management. As these terms are often
used interchangeably and synonymously, it is pertinent to know the
differences and distinctions between these three terms.

According to William Schulze Administration is the force, which lays

down the object for which an organisation and its management are to
strive and the broad policies under which they are to operate.

An Organisation is a combination of the necessary human beings,

materials, tools, equipment and working space, appurtenances brought
together in systematic and effective co-relation to accomplish some
desired object.

Management is that which leads guides and directs an organisation for

the accomplishment of pre-determined object.

To put the above in simple terms, administration sets the goal,

management strives to attain it and organisation is the machine of the
management for the attainment of the ends determined by the
administration.

Some scholars have a different view about the administration and

management. According to Peter Drucker management is associated
with the business activity, which has to show economic performance,
whereas administration is associated with the non business activities
like activities of the Government.

The other view is that administration is associated with performing

routine things in known settings in accordance with certain procedures,
rules, and regulations. The Management is associated with performing
functions like risk taking, dynamic, creative and innovative functions.

Some scholars of Public Administration are closely associated with the

first view that is, administration is a determinative function.
Management, on other hand is an executive function that is primarily
concerned with carrying out the broad policies laid down by the
administration. Organisation is the machinery through which
coordination is established between administration and management.

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1.4 DEFINING PUBLIC ADMINISTRATION

L.D. White observes that although public administration varies in form

and objects, and although the administration of public and private
affairs differs at many points, there is an underlying similarity, if not
identity. As an integral aspect of such generic concept, public
administration could be related to that type of administration, which
operates within a specific ecological setting. It is a means to carry out
the policy decisions made by political executive.

To be seen along with it is the ‘Public’ aspect of Public administration,

which attributes a special character and focus to it. ‘Public’ can be
looked at formally to mean ‘government’. So, public administration is
government administration, government in action, or a socio-economic
and politico-administrative confluence, the focus being especially on
public bureaucracy. Encyclopaedia Britannica defines public
administration as ‘the application of a policy of a state through its
government.’

Public Administration, therefore, refers to that part of administration,

which pertains to the administrative activities of the government.

Now we will try to look into the definitions of Public Administration

provided by various scholars.

Woodrow Wilson

Public administration is the detailed and systematic application of law.

Every particular application of law is an act of administration.

L.D. White

“Public administration consists of all those operations having for their

purpose the fulfilment or enforcement of public policy”. As per White,
this definition covers a multitude of particular operations in many fields
the delivery of a letter, the sale of public land, the negotiation of a
treaty, the award of compensation to an injured workman, the
quarantine of a sick child, the removal of litter from a park,
manufacturing uranium 235, and licensing the use of atomic energy. It
includes military as well as civil affairs, much of the work of courts, and
all the special fields of government activity-police, education, health,
construction of public works, conservation, social security, and many
others. The conduct of public affairs in advanced civilisations requires
the employment of almost every profession and skill-engineering, law,
medicine, and teaching; the crafts, the technical specialties, the office
skills, and many others.

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Percy Mc Queen

Public administration is related to the operations of government whether

local or central.

Luther Gulick

Public administration is that part of the science of administration, which

has to do with the government; it concerns itself primarily with the
executive branch where the work of the government is done; though
there are obviously problems also in connection with the legislative and
judicial branches.

J.M Pfiffner

“Administration consists of getting the work of government done by

coordinating the efforts of people so that they can work together to
accomplish their set tasks”.

M. Ruthanaswami

“When administration has to do with the affairs of a state or minor

political institutions like the municipal or country council (district
board), it is called public administration. All the acts of the officials of
a government, from the peon in a remote office to the head of a state in
the capital, constitute public administration.”

H.A. Simon, D.W. Smithburg and V.A. Thompson

“By Public Administration is meant, in common usage, the activities of

the executive branches of national, state and local governments,
government corporations and certain other agencies of a specialised
character. Specifically excluded are judicial and legislative agencies
within the government and non-governmental administration.”

Corson and Harris

“Public administration … is the action part of government, the means

by which the purposes and goals of government are realised.”

Dwight Waldo

“Public administration is the art and science of management as applied

to the affairs of State.”

M.E. Dimock

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“Public Administration is concerned with ‘what’ and ‘how’ of the
government. The ‘what’ is the subject matter, the technical knowledge
of a field, which enables the administrator to perform his tasks. The
‘how’ is the technique of management, the principles according to
which co-operative programmes are carried through to success. Each is
indispensable, together they form the synthesis called administration”.

Nicholas Henry

“Public Administration is a broad-ranging and amorphous combination

of theory and practice; its purpose is to promote a superior
understanding of government and its relationship with the society, it
governs, as well as to encourage public policies more responsive to
social needs and to institute managerial practices attuned to
effectiveness, efficiency and the deeper human requisites of the
citizenry”.

The traditional definitions of Public Administration, which are given

above reflect the view that the Public Administration is only involved in
carrying out the policies and programmes of the government. It reflect
that it has no role in policy making and also locates the administration
in the executive branch but today the term public administration is used
in a broader sense that it is not only involved in carrying out the
programmes of the government, but it also plays an important role in
policy formulation and covers the three branches of the government. In
this context, we may reflected on the definition offered by F.A. Nigro
and L.G. Nigro. According to them Public Administration:

In this context we can reflect the definition offered by F.A. Nigro and
L.G. Nigro. According to them Public Administration:

• is co-operative group effort in a public setting;

• covers all three branches-executive, legislative, and judicial, and
their inter-relationships;
• has an important role in the formulation of public policy and is
thus a part of the political process;
• is different in significant ways from private administration; and
• is closely associated with numerous private groups and
individuals in providing services to the community”.

In sum, public administration:

• is the non-political public bureaucracy operating in a political

system;
• deals with the ends of the State, the sovereign will, the public
interests and laws;

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 • is the business side of government and as such concerned with
policy execution, but it is also concerned with policy-making;
• covers all three branches of government, although it tends to be
concentrated in the executive branch;
• provides regulatory and service functions to the people in order
to attain good life;
• differs significantly from private administration, especially in its
emphasis on the public; and
• is interdisciplinary in nature as it draws upon other social
sciences like political science, economics and sociology.

1.5 NATURE OF PUBLIC ADMINISTRATION

There are two views regarding the Nature of Public Administration, that
is, Integral and Managerial.

According to the integral view, ‘administration’ is the sum total of all

the activities – manual, clerical, managerial, etc., which are undertaken
to realise the objectives of the organisation. In this view all the acts of
officials of the government from the Attendant to the Secretaries to the
government and Head of the State constitute Public Administration.
Henri Fayol and L.D. White are the supporters of this view.

According to the managerial view of administration, the managerial

activities of people who are involved in planning, organising,
commanding, coordinating and controlling constitute Public
Administration. This view regards administration as getting things done
and not doing things. Luther Gullick, Herbert Simon, Smithburg and
Thompson are the supporters of this view. The managerial view
excludes Public Administration from non-managerial activities such as
manual, clerical and technical activities.

The two views differs from each other in many ways. According to
Prof. M.P. Sharma the difference between the two views is
fundamental. The integral view includes the activities of all the persons
engaged in administration whereas the managerial view restricts itself
only to the activities of the few persons at the top. The integral view
depicts all types of activities from manual to managerial, from non-
technical to technical whereas the managerial view takes into account
only the managerial activities in an organisation. Furthermore,
administration, according to the integral view would differ from one
sphere to another depending upon the subject matter, but whereas that
will not be the case according to the managerial point of view because
the managerial view is identified with the managerial techniques
common to all the fields of administration.

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The difference between the two views relates to the difference between
management and operation or we may say between getting things done
and doing things. The correct meaning of the term administration
would however, depend upon the context in which it is used. Dimock,
Dimock and Koening sum up in the following words:

“As a study public administration examines every aspect of

government’s efforts to discharge the laws and to give effect to public
policy; as a process, it is all the steps taken between the time an
enforcement agency assumes jurisdiction and the last break is placed
(but includes also that agency’s participation, if any, in the formulation
of the programme in the first place); and as a vocation, it is organising
and directing the activities of others in a public agency.”

1.6 SCOPE OF PUBLIC ADMINISTRATION

By the scope of Public Administration, we mean the major concerns of

Public Administration as an activity and as a discipline.

1.6.1 Scope of Public Administration as an activity

Broadly speaking, Public Administration embraces all the activities of

the government. Hence as an activity the scope of public administration
is no less than the scope of state activity. In the modern welfare state
people expect many things – a wide variety of services and protection
from the government. In this context public administration provides a
number of welfare and social security services to the people. Besides, it
has to manage government owned industries and regulate private
industries. Public administration covers every area and activity within
the ambit public policy. Thus, the scope of public administration is
very wide in modern state.

1.6.2 Scope of Public Administration as a Discipline

The scope of public administration as a discipline, that is subject of

studies, comprises of the following:

The POSDCoRB view

Several writers have defined the scope of public administration in

varying terms. Gullick sums up the scope of the subject by the letters of
the word POSDCoRB which denote: Planning, Organisation, Staffing,
Directing, Co-ordinating reporting the Budgeting. Planning means the
working out in broad outline the things to be done, the methods to be
adopted to accomplish the purpose.

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Organisation means the establishment of the formal structure of
authority through which the work is sub-divided, arranged, defined and
coordinated.

Staffing means the recruitment and training of the personnel and their
conditions of work.

Directing means making decisions and issuing orders and instructions.

Coordinating means inter-relating the work of various divisions,

sections and other parts of the organisation.

Reporting means informing the superiors within the agency to whom

the executive is responsible about what is going on.

Budgeting means fiscal planning, control and accounting.

According to Gullick the POSDCoRB activities are common to all

organisations. They are the common problems of management which
are found in different agencies regardless of the nature of the work they
do.

POSDCoRB gives unity, certainty, and definiteness and makes the

study more systematic. The critics pointed out that the POSDCoRB
activities were neither the whole of administration, nor even the most
important part of it. The POSDCoRB view over looks the fact that
deferent agencies are faced with different administrative problems,
which are peculiar to the nature of the services, they render and the
functions they performed. The POSDCoRB view takes into
consideration only the common techniques of the administration and
ignores the study of the ‘subject matter’ with which the agency is
concerned. A major defect is that the POSDCoRB view does not
contain any reference to the formulation and implementation of the
policy. Therefore, the scope of administration is defined very narrowly,
being too inward looking and too conscious of the top management.

The Subject Matter View

We all know that public administration deals not only with the
processes but also with the substantive matters of administration, such
as Defence, Law and Order, Education, Public Health, Agriculture,
Public Works, Social Security, Justice, Welfare, etc. These services
require not only POSDCoRB techniques but also have important
specialised techniques of their own which are not covered by
POSDCoRB techniques. For example, if you take Police
Administration it has its own techniques in crime detection,
maintenance of Law and Order, etc., which are much and more vital to

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efficient police work, than the formal principles of organisation,
personnel management, coordination or finance and it is the same with
other services too. Therefore, the study of public administration should
deal with both the processes (that is POSDCoRB techniques and the
substantive concerns). We conclude the scope of public administration
with the statement of Lewis Meriam: “Public administration is an
instrument with two blades like a pair of scissors. One blade may be
knowledge of the field covered by POSDCoRB, the other blade is
knowledge of the subject matter in which these techniques are applied.
Both blades must be good to make an effective tool”.

We may conclude the discussion with the observation of Herbert Simon

who says that Public administration has two important aspects, namely
deciding and doing things. The first provides the basis for the second.
One cannot conceive of any discipline without thinking or deciding.
Thus Public administration is a broad-ranging and an amorphous
combination of theory and practice.

1.7 PUBLIC AND PRIVATE ADMINISTRATION

The major concern of administration is to properly organise men and

material for achieving desired ends. As a co-operative group activity,
administration is truly universal and operates in all types of public and
private organisations. In other words, administration occurs in both
public and private institutional settings. Its nature depends upon the
nature of the setting and goals with which it is concerned. On the basis
of the nature of the institutional setting, public administration can be
roughly distinguished from private administration. Public
administration is governmental administration concerned with achieving
state purposes, determined by the state. Private administration, on the
other hand is, concerned with administration of private business
organisation and is distinct from public administration. Let us elaborate
this

1.7.1 Distinction between public and private administration

John Gaus, Ludivig Von Mises, Paul H. Appleby, Sir Josia Stamp,
Herbert A. Simon, Peter Drucker, etc., in their writings, have made
distinction between public and private administration.

According to Simon, the distinction between public and private

administration relates mainly to three points:

• Public administration is bureaucratic whereas private

administration is business like;

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• Public administration is political where as private administration
is non-political; and

• Public administration is characterised by red-tape where as

private administration is free from it.

Felix A. Nigro has pointed out that government is also different from
private organisation, as no private company can equal to it in size and
diversity of activities.

According to Sir Josiah Stamp, the four principles, which differentiate

public from private administration, are:

• Principle of Uniformity: Common and uniform laws and

regulations mostly regulate public Administration.

• Principle of External Financial Control: the representatives of the

people through a legislative body control Government revenues and
heads of expenditure.

• Principle of Ministerial Responsibility: Public administration is

accountable to its political masters and through them to the people.

• Principle of marginal Return: The main objective of a business

venture is profit, however small it may be. However, most of the
objectives of public administration can neither be measured in
money terms nor checked by accountancy methods.

According to Paul H. Appleby public administration is different from

private administration. He remark, “In broad terms the governmental
function and attitude have at least three complementary aspects that go
to differentiate government from all other institutions and activities:
breadth of scope, impact and consideration; public accountability;
political character. No non-governmental institution has the breadth
of government.

Appleby notes that the political character of Public Administration

differentiates it from private administration. Public Administration is
subject to political direction and control. This is the primary distinction
between the two. He further argues, “Administration is politics since it
must be responsive to the public interest. It is necessary to emphasise
the fact that popular political processes, which are the essence of
democracy, can only work through governmental organisation, and that
all governmental organisations are not merely administrative entities,
they are and must be political organisms.”

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Appleby reflects further on the distinction between public and private
administration in the context of public accountability “Government
administration differs from all other administrative work to a degree not
even faintly realised outside, by virtue of its public nature, the way in
which it is subject to public scrutiny and outcry. This interest often runs
to details of administrative action that in private business would never
be of concern other then inside the organisation.

According to Appleby private administration cannot claim the breadth

of scope, impact and consideration of the public administration. He
observes, “The organised government impinges upon and is affected by
practically everything that exists or moves in our society. It involves
policies and actions of immense complexity. Its fullest possible
understanding requires the wisdom of many specialists as will as the
key participants in public and private life.

The more important distinguishing features of Public administration

may be described under the following sub-heads:

Political Direction: Public administration is political, while private

administration is non-political, public administration takes place in a
political context.

Absence of profit motive: The absence of profit motive from the

Public administration is another feature, which distinguishes it from the
private administration. The primary purpose of governmental
organisation is to provide services to the people and promote social
good.

Prestige: Public administrators who serve in the Government enjoy

high status and prestige in comparison to their counterparts in private
enterprises especially developing countries.

Public Gaze: All the actions of public administration are exposed to

wide public gaze because the public closely watches it. This does not
happen in private administration.

Service and Cost: Most governments spend more money than their
income or revenues. That is the reason for finding generally a deficit
budget that is, expenditure exceeding income. Conversely, private
administration income often exceeds expenditure without which they
cannot survive.

Legal framework: Public administration operates within a legal

framework. It is rule oriented. The responsibilities of public
administrators are fixed by a set of constitutional practices, laws and

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regulations. Government officials are obliged to act within their legal
powers and not outside the law.

Consistency of treatment: A government official is required by law to

maintain a high degree of consistency in his dealings with the public.
He has to observe the principle of equality of treatment in serving the
people. It is a legal obligation to not to discriminate against any person.

Public accountability: Public accountability is the hallmark of

Public administration in a democracy. Public administration is
responsible to the public, though not directly but indirectly through
political executive, legislature, judiciary, etc.

Large-scale administration: Public administration is large-scale

administration. It is said that almost anything under the sun is directly
or indirectly under the domain of public administration. It is by all
means larger than any big private concern in terms of size., complexity
and diversity of activities.

Monopolistic and Essential Services: In the field of public

administration, there is generally a monopoly of the government and it
does not generally allow private parties to compete with it. For
example, no person or bodies of persons are allowed to establish or
perform functions related to public services like national security,
foreign relations, law and order, mint and currency, as these are the
exclusive fields of the government and thoroughly important for the
community and polity to prosper.

Officials remain Anonymous: In public administration, even the most

senior officials remain anonymous and their identity is not disclosed.
This is so because whatever they do, they do in the name of the
government and not in their own name.

Financial meticulousness: Public administration has to be very careful

in financial matters because it is working as custodian of people’s
money.

Lower level of Efficiency: Efficiency is said to be the cornerstone of

any organisation. However, due to varied responsibilities, lack of
effective control, less accountability, involvement of a large number of
levels and job security of employees, efficiency has not been there in
public organisations to the effect desired. When compared to private
administration, one finds that the degree of efficiency in public
organisations is at a lower level. With profit as the major motive
coupled with excessive control and flexibility in personnel
administration the level of efficiency in private organisations is much
higher.

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1.7.2 Similarities between Public and Private Administration

Scholars like Henry Fayol, Mary P. Follet and L. Urwick do not make
a distinction between public and private administration. The classical
writers held the view that public and private administrations are the
undifferentiated members of the genus administration. Henri Foyal, for
example, says that there is only one administrative science, which can
be applied equally well to public and private sectors. In his address in
the Second International Congress of Administrative Science, Fayol
remarked, “The meaning which I have given to the word administration
and which has been generally adopted, broadens considerably the field
of administrative sciences. It embraces not only the public service but
also enterprises of every size and description, of every form and every
purpose. All undertakings require planning, organisation, command,
co-ordination and control and in order to function properly, all must
observe the same general principles. We are no longer confronted with
several administrative sciences but with one which can be applied
equally well to public and to private affairs”.

The following similarities between the two types of administration may

be noted:

1. Both public and business administration rely on common skills,

techniques and procedures.

2. In modern times the principle of profit motive is not peculiar to

private administration, because it is now accepted as a laudable
objective for public sector enterprises also.

3. In personnel management, the private organisations have been

influenced greatly by the practices of public organisations.

4. The private concerns are also subjected to many legal

constraints. Government is exercising much control over
business firms through regulatory legislation such as taxation,
monetary and licensing policies, etc. Consequently, they are not
as free as they once used to be.

5. There is a similar type of hierarchy and management systems,

both in public and private sectors. Both have same kind of
organisation structure, superior – subordinate relationships, etc.

6. Both Pubic and private administration carries on continuous

efforts to improve their internal working and also for efficient
delivery of services to people or customers.

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7. Public and private administration serves the people, whether
being called clients or customers. Both have to maintain close
contact with people to inform about their services and also to get
feedback about services and product. In both the cases, public
relations help them to inform and improve their services to the
people.

The preceding discussion shows that the distinction between public and
private administration is not absolute. In fact, they are becoming more
and more alike in many respects. However, it does not mean that there
are no significant differences between these two types of administration.
Waldo observes that Public administration is distinct because it reflects
the peculiar characteristics of government activity and the public setting
in which it functions.

Given the wide acceptance of the ideas of liberalisation, privatisation

and globalisation, both public and private administrations have to
compete in the same area to provide services to people. Here both are
dealing with customers, who pay for their services, in such a situation it
narrows down the differences between the public and private
administration. New Public Management, which has come into
prominence, recently, puts emphasis on managerial techniques, which
are to be adopted by public administration for the efficient delivery of
public services. But in providing pubic services in the field of social and
welfare areas their exists a difference between public and private
administration

With this brief characterisation, it could be stated that both public and
private administration are placed in different environments. But this
difference is more apparent than real. According to Waldo, The
generalisation which distinguish public administration from private
administration by special care for equality of treatment, legal
authorisation of, and responsibility of action, public justification of
decisions, financial probity and meticulousness, etc. are of very limited
applicability,” In fact public and private administrations are the “two
species of the same genus, but they have special values and techniques
of their own which give to each its distinctive character.

1.8 IMPORTANCE OF PUBLIC ADMINISTRATION

We will be discussing the importance of public administration as a

specialised subject of study and later the role and importance of public
administration in the modern society.

1.8.1 Importance of Public Administration as Specialised Subject

of Study

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The study of administration assumed significance, according to
Woodrow Wilson, as a consequence to the increasing complexities of
society, growing functions of state and growth of governments on
democratic lines. This exhaustive list of functions made to think as to
‘how’ and in what ‘directions’ these functions should be effectively
performed. To this Wilson suggested that there was a need to reform
the government in the administrative field. As per Wilson, the object of
administrative study is to discover what government can properly and
successfully does and how it can do these things with utmost efficiency
and the least possible cost either of money or of energy.

The importance of public administration as a specialised subject can be

attributed to the following reasons:

• One of the important reasons is the practical concern that the

government today has to work towards the public interest. The
first and foremost objective of public administration is to
efficiently deliver public services. In this context, Wilsonian
definition of the subject as efficiency promoting and pragmatic
field was the first explicitly articulated statement on the
importance of a separate discipline of public administration.
During the first half of the preceding century, a numbers of
countries have appointed committees to look into the problems
of administration and recommended suitable administrative
machinery to respond to diverse public needs. The Haldane
Committee Report (1919) in Britain; the President’s Committee
on Administrative Management (1937) in the United States;
A.D. Gorwala Committee’s and Paul H. Appleby’s Reports in
India are some of the examples of the efforts by various
countries to make changes in public administration. During the
last four decades also, a number of reports, produced by
committees/commissions appointed by governments in various
countries or multilateral agencies, and books published by
scholars have enriched the discipline and provided new
perspectives to public administration to tune it to the changing
needs of the times. They include: Report of the Committee on
the Civil Services (Fulton Committee Report, U.K., 1968);
various reports of the Administrative Reforms Commission
(India, 1967-72); Reinventing Government (U.S.A., look by
David Orborne and Ted Gabler, 1992), Governance and
sustainable Development (UNDP, 1997) and World
Development Report: Building Institutions for Markets (The
World Bank, 2002).

• Administration is looked at, in the social science perspective, as

a cooperative and social activity. Hence the concern of
academic inquiry would be to understand the impact of

17
 government policies and operations on society. What kind of
society do the policies envisage?; To what extent administrative
action is non-discriminatory?; How is public administration
functioning and what are the immediate and long term effects of
governmental action on the social structure, the economy and
polity?; etc. are questions requiring careful analysis. From the
social science perspective, public administration, as a discipline,
has to draw on a variety of sister disciplines such as History,
Sociology, Economics, Geography, Philosophy, Psychology,
etc., with the objective to explain and not just to prescribe.

• Public administration has a special status in the developing

countries. Many of these countries, after independence from the
colonial rule have stressed upon speedy socio – economic
development. Obviously, these countries have to relay on
government for speedy development. The latter requires a
public administration to be organised and effectively operated
for increasing productivity quickly. Likewise, social welfare
activities have to be effectively executed. These aspects have
given birth to the new sub-discipline of development
administration. The emergence of development administration
is indicative of a felt need for a body of knowledge about how to
study the third world administration and at the same time to
bring about speedy socio-economic development with
government’s intervention. Development administration has
therefore, emerged as a sub-discipline to serve the cause of
development.

• Public administration, as witnessed holds a place of significance

in the lives of people. It touches them at every step. For most of
their needs, the citizens depend upon public administration. In
view of the important role of public administration in the lives of
people, the citizens of a country cannot ignore. Therefore, its
teaching should become a part of the curriculum of educational
institutions. People must get to know about the structure of
government, the activities it undertakes and the manner in which
these are actually performed. The study of public administration
will contribute to the realisation of the values of citizenship.

1.8.2 Importance of Public Administration as an Activity

The contemporary age, which has witnessed the emergence of

‘Administrative State’, public administration has become an essential
part of society and a dominant factor. The functions it is called upon to
perform, have expanded in scope and nature, and what is more, are
continually increasing. Many of them are more positive in nature
because they care for the essential requirements of human life, be it

18
health, education, recreation, sanitation, social security or others. It is,
therefore, a creative factor, with its motto being ‘human welfare’.
These functions are over and above its regulatory functions. The view
points of eminent scholars, as referred to below, amply reflect the
significance of public administration.

Woodrow Wilson: “Administration is the most obvious part of

government; it is government in action, it is the executive, the operative
and the most visible side of the government.

Brooke Adams: “Administration is an important human faculty

because its chief function is to facilitate social change and to cushion
the stock of social revolution”.

W.B. Donham, ‘If our civilization fails, it will be mainly because of

breakdown of administration’.

Paul H. Appleby: ‘Administration is the basis of government. No

government can exist without administration. Without administration
government would be a discussion club, if indeed, it could exist at all’.

The role of public administration in various facets is noted below:

• Basis of the Government: A Government can exist without a

legislature or an independent judiciary. But no Government can
exist without administration.

• An instrument for providing services: Public administration is

mainly concerned with the performance of various activities
performed by government in the public interest. Felix A. Nigro
aptly remarks, “The real core of administration is the basic
service which is performed for the public”.

• An instrument for implementing policies: Modern

governments go a long way in formulating and adopting sound
policies laws and regulations. It should not be forgotten that
such policies, laws, etc. are not merely printed papers. Such
paper declarations of intent are translated into reality by public
administration thus converting words into action and form into
substance.

• A stabilising force in society: Public administration is a major

force for bringing stability in society. It has been observed that
though government often changes, but violent change is seldom
experienced by administration. An element of continuity
between the old and the new orders is provided by public
administration. It does not hold true only of constitutional

19
 changes of government in democratic countries, but is also
reflected when there are revolutionary changes in the form and
character of government.

• An instrument of social change and economic development:

Public administration’s role as a change agent is particularly
crucial in developing nations. It is expected of the state at
present to work for accelerating socio-economic change and not
to be a passive agency to maintain the status quo.

• Technical Character: The present day government is expected

to provide various services to its population. The increase in the
number of functions undertaken by the government require
highly specialised, professional and technical, services. Modern
public administration usually represents a galaxy of all of a
nation’s occupations.

According Gerald Caiden public administration has assumed the

following crucial roles in contemporary modern society:

• Preservation of polity;
• Maintenance of stability and order;
• Institutionalisation of Socio-Economic changes;
• Management of large scale commercial services;
• Ensuring growth and economic development;
• Protection of the weaker sections of society;
• Formation of public opinion; and
• Influencing Public policies.

The points mentioned below summarise the reasons for the growing
importance of public administration:

• Emergence of Welfare and Democratic state

Emergence of welfare and democratic state has led to an
increase in the activities of public administration compared to
that of the laissez-faire state. The state has to now serve all
sections of people in the society. This amount to enhanced
responsibilities of public administration. Public administration
is also to regulate and control private economic enterprises to
meet the objectives of the state.

• Industrial Revolution
The industrial revolution gave rise to socio-economic problems
making the government to assume new roles and responsibilities
such as protection and promotion of the rights of workers in
industrial establishments, etc. Consequently, the state has

20
 enacted a number of Industrial and Labour laws and it is
imperative for public administration to implement such laws in
order to meet the requirements of labour welfare.

• Scientific and Technological Development

Scientific and technological developments have brought about
welcome additions in infrastructure such as power, transport and
communication system. The invention of telephone, telegraph
and other mechanical devices such as typewriter, tele-printer,
and calculators, photocopying machines, computers, fax and the
electronic mail has brought revolutionary changes in office
administration. All these have made possible ‘big government’
and ‘large scale administration’. Besides changing the ethos and
character of public administration, the revolution in information
and communication technologies have contributed to improved
delivery of services to people.

• Economic Planning
Centralised economic planning has been pursued in many
developing countries as a method for socio-economic
development. It requires a large number of experts and
elaborate administrative machinery for plan formulation,
implementation, monitoring, and evaluation.

Apart from the reasons cited the rapid growth of population, modern
warfare, increase in natural and manmade disasters, decline in social
harmony, increase in violence due to conflicts, communal riots, ethnic
wars, terrorism, etc. have increased the importance of public
administration.

It goes without saying that public administration is not only the

operative but also the most obvious part of the government. It is
government in action and occupies a significant place not merely as an
instrument of governance but also as an important mechanism for
preserving and promoting the welfare of community. It has substantive
impact upon the life of the people. It is a vital process charged with
implementation of pre-determined, welfare oriented, and developmental
objectives.

1.9 ROLE OF PUBLIC ADMINISTRATION UNDER

LIBERALISATION, PRIVATISATION AND
GLOBALISATION (LPG)

Since the 1980s a number of countries, have been influenced by the

concept of liberalisation, privatisation and globalisation. In the 1980s
India has also started the process of liberalisation, privatisation and
globalisation (LPG). One form of LPG has entrusted the management

21
of public sector enterprises partially or fully to private companies.
Another form of LPG is disinvestment in public sector enterprises,
which is followed in India. As a result of this the public sector
enterprises find themselves in a competitive and challenging
environment. However, the role of public administration under LPG
continues to quite significant. It requires dismantling of a regime of
regulations, controls, restrictions, licences, secrecy and delay. The
bureaucracy has to play an investor friendly, responsive, transparent,
open and competitive role. So, this requires necessary administrative
reform, which should aim at elimination of redundant practices,
procedures, administrative laws and corruption. Thus, the policy of
LPG affects the role, values and skills of public bureaucracy. It also
decreases the scope of the functions of the state, resulting in minimum
of state interference in the lives of the individuals. The state is called
upon to oversee the operational side of the enterprises. This gives the
state a new role as regulator.

Today, the role of public administration is towards more of governance,

then of direct involvement. The public administration has to play
enabling, collaborative, cooperative, partnership and regulatory roles.
Coming to the core areas such as defence, atomic energy, law and order,
foreign policy it has a direct role to play. In certain other areas such as
telecommunications, airlines, insurance, etc., it has to compete with the
private sector, for which there should be regulatory commissions to
provide for equal level playing fields for both the sectors. There are
other areas which it can have partnership with the citizens for efficient
delivery of services, for example, maintenance of schools, hospitals,
irrigation water and civic amenities. An example we can give is the
‘Bhagidari Scheme’ adopted by the Delhi Government. In certain areas
like electricity, water and transport it can have partnership with the
private sector. A number of states have partnership with the private
sector in providing these services. Other such areas are protection of
forests, empowerment of women, micro credit, health schemes, and
awareness programmes, it can have partnership with the Non
Governmental (NGO) and Voluntary Organisations.

In analysing the emerging role of public administration in the new

millennium, we are dealing with governance. And governance implies
that public administration ahs to operate in a wider context and
coordinate ebborts and activities of the governmental agencies at
various levels with that of the market/the private sector, civil society
groups, NGOs and contextual participant or elected local government
bodies, self-help groups, etc. The role and character of public
administration had seen a major transformation. Although it appears
that its directly handled operations have declined in some of the non-
traditional areas, public administration has to provide synergy and
direction for many collaborative, cooperative and regulatory activities

22
with other segments of the society. The accent is also on promotion of
greater public participation. Yet, it is still accountable for the outcomes
of all the activities in which it participates directly or indirectly.

1.10 CONCLUSION

In the preceding text, the importance of Public Administration as a

discipline and as an activity has been discussed. Subsequent
developments in the discipline in response to both practical problems
and academic questions have further enhanced its importance as a
vibrant and meaningful field. In the contemporary world, the burden of
public duties on government has been steadily increasing. It seems that
public administration is indispensable because contemporary
civilisation cannot progress without a sound administrative system.
According to Gerald, E. Caiden “The positivistic-interventionist role of
government would automatically find reactions in academic inquiry.
And as history has shown, the importance of Public Administration as a
discipline has been closely associated with the increasing activist role of
government everywhere. In the context of the newer and the wider
duties and responsibilities thrown on the state, the role of public
administration is more vital and important than of almost any other
branch of government. As a growing field of knowledge and practice,
Public Administration has attempted to meet this challenge”.

1.11 KEY CONCEPTS

Equality: The idea that all persons have an equal claim to life, liberty,
and the pursuit of happiness.
Globalisation: The process of globalisation not only includes opening
up of world trade, development of advanced means of communication,
internationalisation of financial markets and services, growing
importance of multinational corporations, population movements and,
more generally, increased mobility of persons, goods, capital data and
ideas, but also of infectious diseases and environmental problems like
pollution.
Liberalisation: A process of freeing the economy, from various
Governmental regulations such as industrial licensing, controls on
pricing and distribution of products and services, imports and exports
and foreign exchange regulations; control of capital issues by
companies; credit controls, restriction on investment, etc., so that the
development and operation of the economy is increasingly guided by
freely operating market forces. Thus liberalisation is essentially a
process of withdrawal of all direct controls on the economy.
Privatisation: It means transfer, from the public to the private sector, of
ownership or control over assets or activities. Privatisation fosters

23
efficiency, encourages investment – and thus new growth and
employment – and frees public resources for development of
infrastructure and social programmes.
Red Tape: The ribbon that was once used to bind government
documents; the term now stands as the symbol of excessive official
formality and over attention to prescribed routines.
Regulation: The totality of government controls on the social and
economic activities of its citizens; the rulemaking process of those
administrative agencies charged with the official interpretation of laws.
Synergy: The enhanced result of two or more people, groups or
organisation working together. In other worlds one of one equals three!
it comes from the Greek “Synergia”, which means joint work and
cooperative action. The word is used quite often to mean that
combining forces produces a better product.

1.11 References and Further Reading

Baker, R.J.S., 1972, Administrative Theory and Public Administration,

Hutchinson University Library, London.
Bhattacharya, Mohit, 1998, New Horizons of Public Administration,
Jawahar Publishers & Distributors, New Delhi.
Bertram, M. Gross, 1964, The Managing of Organisations, The
Administrative Struggle, The Free Press of Glencoe, Collier-
Macmillan., London.
Denhardt, Robert B. and Joseph W. Grubbs, 2003, Public
Administration: An action Orientation, Fourth Edition, Thomson
(Wadsworth), Canada.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004,
Administrative Thinkers (Ed), Sterling Publishers, New Delhi.
Pugh, D.S., 1985, Organisation Theory: Selected Readings (Ed),
Penguin Books, Middlesex, England.
Sharma, M.P. and B.L. Sardana, 1988, Public Administration in Theory
and Practice, Kitab Mahal, New Delhi.
Srivastava, Om Prie, 1991, Public Administration and Management,
The Broadening Horizons, Volume 1, Himalaya Publishing House,
Delhi.

1.12 Activities

24
1. Consider public administrative operations with which you
have recently dwelt or are familiar as a functionary or as a
citizen.

2. The differences between public administration and private

administration are profound. Explain how the two fields
differ and why the two terms are not interchangeable.

25
 CHAPTER – II

EVOLUTION OF INDIAN ADMINISTRATION

History of Indian administration traces its earliest known form to the

monarchical system. Since the earliest times, the monarchical system was

used in public administration in the execution of governmental functions. In the

long history of Indian administration, a number of administrative organisations

rose and fell. However, there are two basic features of the Indian administrative

system which continued right down the ages- the importance of the villages as

a primary unit and co-ordination between the two opposite trends of

centralisation and decentralisation. To put it in a nutshell the present

administration is a developed since from Vedic period 1.

Abundant sources are available to get a clear picture of the history of

Indian administrative system. A lot of information regarding the organisation

and functions of Indian administration is obtained from Vedic literature,

Buddhist treatises, Jain literature, Dharmasastras, Indian Puranas,

Ramayanas, Mahabharata, Manu Smriti, Sukra Niti and Arthashastra.

The powers of administering the states were centralised in the hands of

the king during the ancient period in India. During the Vedic period the king was

assisted in his work by many officers. He was surrounded by a circle of his

friends and principal officers. There is a reference regarding this in the two

epics of Ramayana and Mahabharata. A similar reference is also to be found in

Manu Smriti and Sukra Niti. In Kautilya's Arthashastra is obtained a detailed

account about the offices of the state for the first time in the history of India. By

this time administrative system was fully developed. Thus the development of
22
the ancient Indian administration had reached its peak during the reigns

of Chandragupta Maurya and Ashoka. Mauryan administrative institutions were

further developed during the period of the Guptas. Their period witnessed

multifarious activities in the field of administration.

The decentralisation process had started in ancient India. As a result of

this, empires were divided into provinces, provinces into districts and districts

into urban and rural centers from administrative angle. During the ancient

period state administration was divided into numerous departments. In Vedic

times the number of such departments was limited. Gradually, the number of

such departments increased and their jurisdiction extended. For this we get

many references can be obtained from Vedic literatures and subsequent

sources. In ancient Indian administration there is also found a description of the

principles of public administration. Thus, the principle of hierarchy had been

given a practical shape and seeds of co-ordination were present between

different departments. Such a full-fledged administrative system existed in the

reigns of Chandragupta Maurya and Ashoka. Great emphasis was placed on

observation and inspection along with the principle of hierarchy. 2

Like the present day personnel system mention is made in ancient

administration system of the recruitment, qualifications, salaries, leave, pension

etc., of government employees. At that time merit, efficiency and being a

member of the elite group were given special emphasis. During the time there

existed the organisation of a central office where all the government records

were kept. This was like the secretariat of the government, in which various

government functionaries, including officers worked. Mention of such an office

23
is found in Mauryan times and Chola kingdom. The king appointed personal

secretary as well. In brief, the main function of the central office was the control

and inspection of provincial, regional and local government.

In brief, it can be said that the present Indian administration is the result

of a rich legacy and continuity. It is true to say that the steps of its evolution are

someway or the other connected with the past. However, the existing

administrative system in India may be said to be the contribution of the British

government.

Indian 'Administration' traces its earliest known form to the tribal system

which later emerges as a monarchical system. We gain a lot of knowledge

about ancient Indian Administration from ancient religious and political

treatises. In the early Vedic period there were many tribes who elected their

own chiefs and he handled all their responsibilities and the administration of the

tribes and the Sabha (Assembly of elders) and Samiti (Assembly of people)

were the tribal assemblies. The chief protected the tribe but had no revenue

system or hold over land thus wars were resorted to and the booty shared

among the tribes.3

The first form of the 'State' in India can be traced back to the times of

Manu(original name Satyavrata) the first King and progenitor of mankind

according to Hinduism. People were fed up with anarchy as there was no

neutral judge/arbitrator in between to solve issues of society, and so they

appointed Manu as King and paid service fees as taxes for looking after them

and ensuring mutual benefit and justice to everyone in society owing to his

24
wisdom and philosophical attitude and the King was divine and regarded as

descended from God.

As per the Ramayana and Mahabharata/Later Vedic times it goes to

portray the role of the King as the whole and sole of administration being

helped by his principal officers who were the Purohit and Senani where the

Purohit (Priest) wielded much more authority than the kshatriya (Warrior

clan) kings. Other figures of administration were Treasurer, Steward, Spies and

Messengers, Charioteer, Superintendent of Dices. This is also mentioned in the

Manu Smriti and Sukra Niti.

No legal institutions were there and the custom of the country prevailed

as the law and capital punishment was not practiced but trials took place where

justice was delivered by the King in consultancy with the Priest and Elders at

times. By the time Kautilya wrote the Artha Shastra the Indian Administrative

system was well developed and the treatise of Kautilya gives a very first

detailed account of the same. We will discuss that below.4

Kautilya's Arthashastra :

The Mauryan period was the era of major development in Indian

Administration. Decentralisation was prevalent as the village units played a

very important role as the base of administration since ancient times. Empires

were divided into provinces, provinces into districts, districts into rural and

urban centers for efficient administration.

Kautilya's ArthaShastra is a work on Varta ( Science Of Economics) &

Dandaniti (statecraft/Management Of State Administration) existing in the

25
Mauryan rule. It was written sometime between 321 and 300 BC. It was

retrieved in 1904 AD and published in 1909 AD by R. Shamasastry. It touches

upon topics like functions of the chief executive, hierarchy, bureaucracy,

corruption, local administration, supervisory management, motivation, morale

and Job description.

The most noticeable aspect of the Arthashastra is its emphasis on

Public Welfare even in an autocratic agrarian State. That is where its

timelessness lies. It is composed in the form of brief statements called Sutras

and is compiled in 15 books (Adhikarnas), 150 sections,180 chapters

(prakarnas), 6000 verses (sutras).

The 15 books could be classified under:

i) Concerning the discipline of economics and statecraft.

ii) Duties of government Superintendent.

iii) Concerning the Law

iv) Removal of thorns

v) Conduct of courtiers.

vi) Sources of sovereign State.

vii) End of six fold policy

viii) Concerning vices of the king and calamities that may arise as a

consequence

ix) Work of an invader

x) Relating to a war.

xi) Conduct of a corporation

xii) Concerning a powerful enemy.

26
xiii) Strategic way of capturing a fort

xiv) Secret means like occult practices and remedies to keep of enemies or

traitors.

xv) Plan of the treatise and thirty two methods of treating a subject.5

Kautilya viewed the State as an institutional necessity for human

advancement. According to him the State comprises of eight elements - King,

Minister, Country, fort, treasury, army, friend and enemy. And State's prime

function was to maintain law and order, punishing wrong doers and protecting

subjects.

The empire was divided in to a Home Province capital territory or

administrative unit under direct control of the central government and four to

five outlying provinces (States), each under a Governor or viceroy responsible

to the central government. The provinces possessed a good amount of

autonomy in this feudal-federal type of organisation. Provinces were further

divided into districts, districts into rural and urban centres with a whole lot of

officials in charge at various levels. Departments to carry out execution of

policy were created in all of these divisions with specialists dominating in the

Mauryan era. Elites were preferred in job recruitment and the procedure for

appointing is the same as it is practiced today. A centralised data bank of all

government transactions and records were maintained in an organisation of the

centre just like the cabinet secretariat and this performed audit and inspection

functions of the three tiers of government that is local, state and central.

This set up is very much similar to our present times where Union

Territories and National Capital Territory are administrative units under Central
27
rule where representative of the centre in the form of administrators or

Lieutenant Governor appointed by the President rule the affairs under the direct

supervision of the President and Central government. The states are under a

governor (viceroy in olden times) appointed by and reporting to the

President(King in olden times). The President is advised by his minister(s) and

the sovereign power lies in the country's people. Also, the federal setup of

powers given to states under the state list, and the district administration

organisation and hierarchy. Civil servants were recruited to perform the duties

of policy implementation.

King was the head and his functions were military, judicial, legislative

and executive, similar to modern state's functions of the President, he was to

be well equipped in all areas of study especially economics, philosophy,

statecraft and the three Vedas. kautilya stated that whatever pleases the king

only is to be avoided and only that which pleases the people is what needs to

be followed. Kautilya stated that the king was like the Father and all the people

or subjects of the country or empire were his children. This show how he take

care of them. This attitude of kautilya conceptualized as welfare state in

modern times.

Corruption was not tolerated at all and dealt with severely where the ill-

earned money was confiscated. Kautilya had his own criteria for selection of

officers for the same. Once basic qualifications were met he tested them on

their attitude to piety, lucre or revenue, lust, fear. Those who completed this

criteria of piety were appointed as judges or magistrates and those who

crossed the test of revenue became revenue collectors, and those pass the test

28
of lust are appointed to the king's harem, The candidates passing the test of

fear are appointed as king's bodyguards and personal staff. And those who

pass all the tests are appointed as councillors.

There were two courts according to the Arthashastra called the

Dharmasthya (civil cases court) where the matters are disposed off on basis of

dharma, procedural law, conventions, royal decree; and Kantakashodhana

(criminal cases court) where accused is convicted on basis of testimony and

eye witness of spies, etc. Similar to today's times where there are separate

courts having the subject matter jurisdiction of civil or criminal issues.

Agriculture was the mainstay and taxes on the goods produced as well

as its imports and exports were the source of revenue and the expenditure

focused on public administration, national defense, army, salaries of govt.

officials. Agriculture plays an important role even today in our country. 6

Therefore, as one can see Kautilya's arthashastra deals with a proper

strategy and system of centralised autocracy with a welfare objective in mind

before performing any function by the king and his minister.

Weaknesses of the Kautilyan State :

i) Over charged with supervision - too much of checks and balances.

ii) Prominence on individuals instead of institutions.

iii) Fundamental mistrust of officials.

The Guptas carried forward the Mauryan legacy of administration in

many respects.

29
Links between Kautilyan Administration and Modern Personnel

Administration and Public Administration

1) Personnel Administration :

A system of recruitment was there and job description as well. Salaries

were clearly spelled out of ministers and government officials. It also stated a

view of job permanency and increment in salary or position (promotion) if the

official concerned provided extraordinary service. Personnel were to be

transferred from time to time as per Kautilya because it would avoid corruption

and misappropriation of government funds. Removal and tenure of officials

and ministers were at the pleasure of the King just like the Governor and

Attorney General, etc. hold office at a term that specifies ' pleasure of the

President'.

2) Public Administration :

The King is the sole source of authority and appoints and dismisses

personnel and divides the work of govt. into different ministries under several

ministers and officials. Kautilya stresses on the need for specialist and

generalist personnel at different levels of administration with full accountability

to the King, thus talks about division of labour and coordination between them

for efficient administration. As discussed above there was a clear system of

recruitment, pay and terms and conditions of service very much resembling the

modern State.

Modern state is more concerned about development whereas the

Kautilyan model talks about collecting revenue and employing activities to help
30
in expediting and ensuring revenue, so it talksmainly of control instead

of development. It talks about local self government that very much resembles

a precursor to the Modern State local self government model.

Kautilya's Arthashastra is more about political science that is how to

conduct State affairs rather than focusing on the philosophy that underlies it.

He is very practical in his approach with a strict focus on amorality so that the

King's rule and administration are neutral without offending anyone, and also

on rationality and an organized as well as efficient way of running a system with

a great deal of focus on accountability and honesty and vigilance.

Mughal Administration :

The Mughal administration was the most organised and long lasting and

has even carried on to the modern times. The reason for this stability was the

long lasting more than 3 centuries rule of the Mughal sultanat. Akbar was the

architect of this system since his grandfather and father Babur and Humayun

respectively had their hands full with battles and socio-economic uncertainties

leaving little time for administrative activities.7

A very detailed, reliable and brilliant account of Akbar's empire, society

and administration is given in the famous detailed document/text by Abul Fazl

titled Ain-i-Akbari (Constitution of Akbar), lot of earlier tradition of administration

were adopted by Mughals.

The Mughal administration did carry forward a lot of the earlier traditions

in political and administrative matters already existing in India as mentioned

above but they upheld greater centralization and a rigid structure without
31
paying much interest to social services of health and welfare as also morals as

compared to the Mauryan rulers. Theirs was an Islamic state and right from the

principles of government, church policy, taxation rules, departmental

arrangements to the titles of officials all was imported wholesale from the

Person-Arab crescent of khalifs of Iran and Egypt. However, even though the

recruitment was mainly based on caste and kin they also did recognize merit

and talent and did open up the civil services for Hindu people. It's source of

revenue was taxation on land and agriculture and was highly urbanized. In the

lower levels like of politics, village and lower levels of officials the Indian usage

and customary practices were allowed whereas at the court or darbar and in

higher official circles the foreign imported model of policy prevailed. 8

The sovereign was the king who was paternalistic and he had supreme

authority over everything. He did have a number of ministers to help, advise

and assist him in the discharge of his functions, out of which the more

important were four- the Diwan who was in charge of revenue and finance, the

Mir Bakshi at the head of the military department, the Mir Saman in charge of

factories and stores, and the Sadr-us-Sudur who was the head of the

ecclesiastical and judicial department.

Administration was based on coercion in the name of the King by the

officials. The main functions of the officials were to maintain law and order,

safeguard the King's interests from internal uprising and revolts, defend and

extend boundaries of the empire and collect revenue and taxes.

Every officer of State held a mansab (official appointment of rank and

profit and expected to supply certain number of troops for State military service)
32
thus the bureaucracy was essentially monetary in character. The officials

ranged from Commanders of 10 to 10000 and were classified into 33 grades.

Each grade carried a certain rate of pay, from which its holder was to provide a

quota of horses, elephants, etc and the State service was neither hereditary nor

was it specialized Grading system is practiced even today in recruitment

matters.9

The pay was received in form of either cash or jagir for a temporary

period from which he could collect revenue equivalent to his salary. Thus, the

jagirs though having no hold over the land extracted revenue at their whims

and fancies from the land.

The Army of the Mughal empire must be understood in terms of the

Mansabdari system. And apart from that there were the knights who were

called the gentleman troopers and owed exclusive allegiance to the King. The

cavalry was the most important unit, the infantry was made up of townsmen

and peasants and the artillery with guns and the Navy. The corruption within

the army where the soldiers played more allegiance to the immediate boss

rather than the king proved to be its undoing and thus could be easily

overpowered by the Marathas during the time of Jahangir.

The Policing system of the Mughals was entrusted to village headman's

and subordinates in villages and to Kotwals in cities and towns. And at the

district level the faujdars took over. It was a precursor to modern policing

system of India.

33
 The administration at the Centre was personal and paternal and

operated with a fair degree of efficiency as long as the King kept an eye and

controlled effectively. The two highest officials were the Vakil and the Wazir of

which the former was higher in position and functioned as the regent of the

State and maintained over all charge of the same.

The Wazir was the head of the revenue department and was known as

Wazir when he acted as a Prime Minister. Chief Diwan supervised revenue

collection and expenditure and was the head of the Government's

administrative wing supervising work of all high officials. All provincial diwans

and their subordinates reported to him and he signed and authorised all

government transactions. A Musatufi audited the income and expenditure of the

government and the Waqia Navis kept a record of all important farmers.

The Khan-i-Saman was the high steward of the royal expenditure and

the Mir-i-Bakshi who was the paymaster General of the empire. The Provincial

or State Administration was also known as Subahs (for states or provinces) and

was headed by the Subedar or the Governor. He was appointed by the King

and was given a office insignia and instrument of instructions which defined the

powers, functions and responsibilities. As executive head he was in charge of

provincial administrative staff and ensured law and order there. He also

handled local civil intelligence agencies and controlled the local zamindars and

contained their political influence.10

Provincial Diwan was appointed by the central Diwan and was next in

the line of importance after the Provincial governor. He appointed Kiroris and

tehsildars to extract revenue from the ryots in time. He also exercised audit
34
functions and had full control over public expenditure. He was assisted in office

by the Office Superintendent, head accountant, treasurer and clerk. The

provincial Bakshi performed the same function as the central bakshi.

The Sadr and Qazi were two officers at provincial level who were sometimes

united in the same person but the Sadr was basically a civil judge but did not

handle all civil cases and the Qazi was concerned with civil suits in general and

also with criminal cases.

District and Local Administration Under Mughal Rule :

The Subah or Province was further divided into Sarkars which were of

two types. One was ruled by officers appointed by the emperor and those

under the tributary rajas. Each Sarkar was headed by Faujdar, he was the

executive head who had policing and military functions and could surpass the

provincial rulers to speak directly to the imperial government.

The Amalguzar was in charge of the revenue and the other head of the

Sarkar. The Kotwal did the policing. The qazi performed the judicial duties. The

Sarkars were further divided into parganas and the parganas further divided

into Chaklas headed by officials called Chakladars. Qanungos kept the revenue

records and the Bitikchi was the accountant and Potdar was the title of the

treasurer. This was the hierarchy for a sound and efficient administration Akbar

kept the land revenue at 1/3 and Todar Mal brought in reforms as in a standard

system of land revenue collection that included survey and measurement of

land, classification of land based on its fertility and fixing the rates. Justice was

administered based on the Quranic Law as the Mughal state was a Muslim

State. Fatwas were issued when required and ordinances by the emperor.

35
The principles of equity were followed and the Emperor's interpretations only

was allowed till the point it did not run contrary to the sacred laws.

Legacy of British Rule in Politics and Administration - Indianization of

Public Services

Though many of Indian administrative and political features evolved post

1947 but there still are certain features that we can see as a legacy of the

British times continuing for the sake of its efficient practices and no other better

alternative to the same till now.

Under the charter (official paper) of the British crown the East India

Company came to India with the sole objective of making profit through

commercial exchanges. The established factories here and for their protection

set up a small base of soldiers. They started looking for monopolizing their

profits in India as her market and resources were unmatched. This led to the

initial tussle with Bengal Nawab and the event of Battle of Plessey paved the

way for the same. The company officials convinced the company directors that

if they interfered and got a say in local policy making in India then it would lead

to a lot of profit and surplus.11

Lord Cornwallis developed the Civil Services Code and so he is aptly

known as the Father Of Modern Civil Services. He regularized and specified

the office of the District Collector and established the office of the District judge.

This helped the company achieve a well organised personnel administration

through which control over territories/provinces in India could become more

comprehensive.

36
 Lord Wellesley's rule period saw the emergence of the office of the Chief

Secretary (1799). The doctrine of Subsidiary Alliance was an aggressive policy

that resulted in the active interest of company officials in political and

administrative affairs of local kingdoms governed by local Rajas. The early

1800s could be seen as an era where company officials focused all their

strategies in gaining interference rights in political, commercial and military

policies of local kingdoms for their profit.

The office of the Commissioner and sectional arrangement in the

Secretariat saw the light of the day under Lord Bentick's rule. Under the Charter

Act of 1833,the Governor General of Bengal was appointed as the Governor

General of India and policy formulation was centralized for all territories under

the company at the council of the Governor General Of India(Head of the

British Administration In India). Also there was an establishment of

communication between the Governor general's office which was the

headquarter and its various field units and formal units of organisation. 1844

established 4 departments of Finance, Home, Foreign and Military as well as a

little later on under Lord Dalhousie the setting up pf Post and Telegraph

Services, Railways and Public Work Departments. The Doctrine of lapse theory

of Dalhousie very blatantly spelled out the objective of the company in India as

to have absolute control over the policy process in Indian States. Thus all these

establishments and policies helped the English to set up a strong base in India

along with rights of revenue by means of strong organizational infrastructures

and institutions and interference in legislation and policy making even in the

remotest of areas.

37
 The Revolt of 1857 then shook up this system and that led to the end of

the British East India Company's rule in India. The government of India Act

1858 passed in the British parliament led to the company's dissolution and all

powers transferred to the British Crown which then created an India Office in

India and a Secretary of State post was established with Indian governance

and policy formulation matters. The Governor General was converted to

Viceroy General of India (Chief Administrator of the British Crown in India) who

implemented the policies devised by the India office which actually only had the

role of passing on orders of the British Parliament. Military was reorganized and

more higher caste officials were appointed at the higher levels and lower level

occupied by lower caste as well as Europeans held the titular positions in the

army. All this was done to avoid another mutiny so that communication is

minimum considering the caste baseness prevalent in India.

So, in short the British East India Company paved the way for the British

government to enter. As soon as the Company outlived its utility, it was

removed and the British government directly entered the Indian domain.

Impey devised a civil procedure code and Macaulay devised the Indian

Penal Code, Contract Act and Indian Council Act. The enactment of the

Criminal procedure Code by the British Parliament in the 1860's brought

immense joy to the local rajas and people as they thought that now all the

English officers would function under a code of conduct and there will be

uniformity in treatment. There was also formulation of Arms act, Vernacular

press act, Relationship codes, Transfer rights, etc. Thus, this era of late 1800's

could be seen as one that was dedicated to establishing a legal environment

38
for the smooth functioning of the British officials as they felt that no rules and

regulations earlier led to the situation of disarray and sepoy mutiny or revolt.

There was also the demand of Indian initiation of the Civil services that was first

totally occupied by Europeans and was causing a lot of discontent among

Indians and Indian associations. Thus, for this purpose the Aitchison

Commission recommended the induction of 25% Indians into the ICS, but this

only remained on paper. The Islington Commission was appointed in 1912 and

its repirt, submitted in 1915 recommended a scheme of 2 entry paths to the civil

services. One was for insuring induction of natives of India through competitive

exams and the other exam for superior ICS and Home services preliminary

exam to be conducted in England was open to all. The Civil services was under

the control of the Secretary Of State.12

The Govt. Of India Act in 1919, created the All India Services replacing

the imperial civil services format. This act also advocated the setting up of

Public Service Commissions in India. The provincial civil services were under

the control of the provincial governments.

Lee Commission and the Royal Commission on superior civil services

specially recommended for the establishment of central services. Subordinate

services were advocated for removal from the classification of civil services and

transferred to the regional levels for conducting exams and filling up of

positions only by Indians. So, basically it was a system to prevent Indians from

entering the higher civil services as everybody could not afford to go to England

for training and exam purpose and the lower levels were more approachable

and attainable by the Indians. Also English as a compulsory language offered

39
little scope of success for non-westernised Indians. On the recommendation of

the Lee Commission, the first Public Service Commission was setup at

Allahabad in 1925. The Lee Commission recommended a 40-40 percent of

Europeans and Indians to fill up the superior ICS and the rest 20% to be filled

up with promotions from the provincial Indian sub ordinate services. Thus he

advocated 60% Indians. This led to the Britisher’s losing interest in joining the

services as they feared a monopoly of Indians and so the number of Indians in

the services increased gradually. The Govt. Of India Act 1935 provided for the

setting up of federal Public service commissions and also recommended for

similar institutions at the state levels. This was the realisation of giving the All

India Service an Indian flavour and towards the Indianisation of Civil Services.

Portfolio system was introduced in the Central Secretariat under Lord

canning and arrangement of departments under Lord Mayo, Lord Lytton and

Lord Ripon. Tenure arrangement was introduced under the Secretariat staffing

scheme of Lord Curzon in 1905.

A special mention needs to be made here of the administrative systems

or features passed on Judicial administration system of the Mughal period still

exists in Indian administration.

Revenue Administration and District Administration Under British Rule

After the battle of Buxar ended with the treaty of Allahabad, the company

obtained "Diwani" rights from Shah Alam II and was legally authorised to issue

dastaks in the name of the King thus paving the way for the company officials

to enter revenue assessments and collection duties.

40
 This very event began the evolution of the system of district

arrangement that we see today. The District Collector's office was established

in 1772 and it played a leading role in stabilizing the company's hold over the

revenue at local levels. 1780 saw the establishment of a Revenue Board

created as the apex advisory body for suggesting scheme of Land Revenue

Settlement. This is where we see the shift of the company major from

commercial activities to administrative control in India. The revenue Board's

recommendations culminated into Permanente Settlement Act in Bengal,

Orissa and areas of Assam, Ryotwari arrangement in Presidencies of

Maharashtra and Bombay, Mahalwari system in areas under the control of

North India.

Local Self Government Under British Rule :

This term originated during British rule. Lord Ripon is called the father of

local self government in India but was unable to push for major reforms. They

lacked autonomy and gradually declined by way of establishment of local civil

and criminal courts, revenue and police organisations, increased

communication, and starting of the Ryotwari system where peasants paid

directly and individually instead of collectively or under the zamindar.

Panchayats maintained the local social order according to the socio-political

norms prevailing.

The Montague Chelmsford reform in 1919 made it a transferred subject

under the dyarchy that led to the establishment of a number of panchayats in

all villages to have a proper and efficient local self government or

administration as well as revenue collection for the British but was still under
41
the total control of the District collector and red tapism and corruption plagued it

and funds crunch was always there as a deliberate attempt by the British to

stranglehold the provincial Indian governments from having control over them

and so had to depend on the centre/British government for everything. 13

So, the local self government though had control over certain aspects

but in the others it was just a pawn of the British government for their colonial

benefits.

The present administrative system in India was evolved during the East

India Company’s rule in the country. This period will be divided into two parts

for study purposes. First, the East India Company’s rule upto 1857 and second,

the British government rule from 1858 up to 1947. The East India Company

came to India for purely business purposes, but later took over the government

of the country. The end of the company rule came in 1858 with the taking over

of the government by the British Crown. These are some of the very important

evolutionary steps in the administrative history of India. After the death of

Aurangzeb in 1707, the Mugha1 empire began to disintegrate and the central

administration became paralysed. The small rulers who earlier accepted the

suzerainty of Mughal emperors, started fighting among themselves. The East

India Company took advantage of this situation and established its hold over

several parts of the country. The battle of Plassey in 1757 paved the way for

the real authority in the hand of the Company.

The East India Company in the year 1765 secured the Diwani rights of

Bengal, Bihar, and Orissa, but it did not change the administration of these

provinces and mainly continued the administrative system of the Mughals.

42
However, the British wanted to reduce the exploitation of the people of these

provinces by the ‘Zamindars’ and other intermediaries. Therefore, they

established rapport with the people through their own officers and this led to the

establishment, in stages of the modern system of district administration. In

1772 they appointed ‘Supervisors’ in each bigger district, who were later

nominated as ‘Collectors’ by Warren Hastings in 1772. The Board of Directors

of the Company in 1786 directed the Governor-General in Council to place all

the districts under Collectors. These collectors were responsible for collection

of land revenue, dispensation of civic justice and magisterial work, etc. This

office is a most significant one, even today. In the year 1829, Divisional

Commissioners were appointed in Bengal to supervise the administration of a

group of districts and this was the beginning of the Divisional Commissioner

system, which is still in vogue in present states. Four years after receiving the

‘Diwani; the conferment of which did not ‘ipso facto’ make the company a

sovereign authority in Bengal. Bihar and Orissa but which led the way to

exercise of such authority, it did not make any move in respect of organizing

the government which was now in a state of virtual collapse. But from 1769

onwards, the Company started making experiments in this regard. At first, they

proved to be not only ineffectual but also almost disastrous. By 1786, however,

it appeared to have groped its way into the right direction. But even then further

experiments had to be made to make the structure efficient and well organised

and the administration stable and strong. Though the Company had control

over some of the Indian provinces, the administration was unstable and not so

good. The result was the passing of various Acts by the British Government.

43
For the purpose of study of the evolution of the Indian administrative system

during this period, we shall divide it into the following two periods:

1. Administrative system before 1858.

2. Administrative system after 1858 upto 1947.

The year 1773 was a landmark in the growth of Indian Administration.

Before 1773 there was no central authority in the country. The 1773 Act

restricted the powers of the presidencies from making war or treaties without

the sanction of the Governor-General in Council. This confirmed the British

Parliament’s control over East India Company’s affairs. The Pitt’s India Act of

1784 placed Indian Affairs under the direct control of the British Government,

by establishing a Board of Control representing the British Cabinet, over the

court of Directors. The Court of Directors of the East India Company were

required to pay due obedience (and be) governed and bound by such orders as

they shall from time to time. receive from the said board.” The appointment of

Governor-General was made by the directors with the approval of the Crown.

The position of the Governor-General became very difficult with the introduction

of the system of dual control. This system with some modifications remained in

operation till 1858. As a result the Company’s administration became not only

cumbersome but also dilatory.

The Company’s rule ended with the enactment of the Government of

India, Act, 1858 and passed on to the Crown. The Board of Control and the

Court of Directors, both were abolished and their powers were given to the

newly created office of the Secretary of State for India. His office was known as

India office which enabled him to discharge his functions smoothly.

44
Portfolio System :

The governments work increased and its pressure was felt by the

successive governor generals. Inordinate delay became unavoidable. This

situation improved when the innovation known as portfolio system was

introduced in 1859 by Lord Canning. According to this innovation, a member of

the Council would be appointed in charge of one or more departments of the

government by Governor-General and he would issue orders on behalf of the

Governor-General- In-Council. The Act of 1861 Section 8 gave statutory

recognition to this innovation. Where any other department was concerned, it

was also consulted: the finance department would advise on matters relating to

finance and expenditure, so also the home department for matters relating to

the services of the general administration or internal politics. If the concerned

department did not agree, the matter was referred to the Governor-General.

Every important matter of any department, as well as where it was proposed to

overrule any local (Provincial) government, reference to the Governor-General

was necessary. The Portfolio system, in the first place increased efficiency and

speed of the government work. Second, the members of the council were

recognized as heads of their departments and had greater degree of initiative

and responsibility in the working of the departments.

The Act of 1861 enlarged the Executive Council of the Governor General

by adding a fifth as the law member and he was given power: to conveniently

transact the business. This Act tried to render the Executive Government too

strong to be handicapped by any expansion of the legislature and restored the

legislative powers of the local governments without affecting central control.

The Act of 1870 also empowered the governor general to suspend such
45
measures of resolutions of the Councils which may have the interest of British

possessions in India. The Indian Council Act of 1892 enlarged the function and

members, of the legislative Councils, but not implemented into. Two fifths of the

additional members were to be non-officials. The Act also introduced the

principle of election in an indirect manner. Although the Act did not provide for

direct election, the mode of indirect election produced a result which turned the

balance of power against the landed aristocracy and placed legal Practitioner in

the dominant position. The Act of 1909, popularly known as the Morley-Minto

Reforms. carried the above policy further. The Act increased the size of the

legislative councils at all levels. They still remained deliberative bodies only.

The indirect election system continued but for the first time separate

representation was given for the Muslims.

Introduction of Local Self-Government :

In 1688 a corporation in Madras was established. In 1726 Calcutta and

Bombay corporations were created. In the Presidencies of Madras and

Bombay, ancient village system of rural self-government agency was retained

and in the 19th Century, Panchayats received encouragement from district

authorities.

The Government of India resolution 1864 admitted the desirability of the

local people’s capability to run the local affairs. A further step in the direction of

local self-government was taken by Lord Mayo in 1870, popularly known as

Mayo Resolution of 1870. As a result New Municipal Acts were passed in

various provinces between 1871 and 1874 to relieve the burden on imperial

finances by levying local rates and cesses and also extended the elective
46
principle. The next important step was taken during the viceroyalty of Ripon,

who has been called the ‘Father of Local Self Government In India’.14

In 1882, the famous Ripon Resolution for local self Government was

issued which continued to influence the development of local government in

India, till 1947. The resolution said. “It is only primarily with a view to

improvement in administration that this measure is being put forward and

supported, it is desirable as an instrument of political and popular education”.

The result was enactment of series of Municipal Acts and enactments for rural

areas.

The Decentralization Commission in its report of 1909, emphasised the

importance of Village Panchayats and recommended the adoption of special

measures for their revival and growth. It also recommended the lessening of

government control over local bodies and augmenting the sources of income of

these bodies but neither the government of India nor the provincial

governments faithfully carried out the Ripon’s Resolution.

The Montague-Chelmsford Report on constitutional Reforms (1918)

examined the system of local self-government prevalent in the country and

stated that local bodies would be made autonomous and outside control would

be minimal.

Administrative Reforms of 1919 :

The Government of India Act, 1919 introduced the bicameral system and

demarcated the central and provincial subjects. The central list consisted of

important subjects such as defence, foreign affairs, tariff and customs, railways,
47
post and telegraphs, income tax, currency and coinage, all India services, etc.

The Provincial list included local self-government, public health, public works,

education, water supply, irrigation, agriculture, land revenue, police, forests,

justice, excise & fisheries, etc. The Provincial subjects were further divided into

“resolved” and “transferred” subjects. The ‘reserved’ subject being important,

were placed under the charge of counselors, who along with governor were

made responsible to the Secretary of State and the Central legislature. The

administration of “transferred” subjects was entrusted to the ministers

responsible to the Provincial Legislative Council. The distribution of executive

power between the Governor-General in- Council and the governor acting on

the advice of his ministers responsible to the provincial legislative council was

called dyarchy. This reform reduced the control of Secretary of State for India,

over the central and provincial administration so far as the “transferred”

subjects were concerned; but as regards “reserved” subjects, there had been

no change. This Act was a step to provide opportunity to Indians to take charge

of departments of Provincial administration, not as nominated ones but as the

elected leaders of legislatures. This new scheme was based on three

principles. First, the central and provincial spheres were demarcated and

distinguished from each other. Second, the provinces were considered to be

the most suitable for experiment of self government. Third, an attempt was

made to give an effective voice to the people in the conduct of the Central

Government.

Administrative Reforms of 1935 :

The Government of India Act, 1935 had two basic concepts: one

Provincial autonomy and the other, an all India federation. In the structure of
48
the Home Government, some changes were made. The Indian Council was

dissolved and to take its place, there was to be a set of advisers to the

Secretary of State for India, whose number was fixed between three and six.

The Secretary of State had the right to consult these advisers individually or

collectively. The Act provided for the introduction of dyarchy at the centre,

whereas the system of dyarchy in the provinces, was abolished. The federal

executive was made partly responsible to the federal legislature. The executive

councilors were put in charge of defence, external affairs, ecclesiastical affairs

and tribal affairs and were responsible to the Governor-General and not to the

federal legislature. The governor General would interfere in the work of the

remaining subjects in the federal legislature, on the ground that it affected the

discharge of his special responsibilities. But this was never done as the

scheme could not be operated.15

Under the federal set-up, the subjects were divided into three lists, the

Federal, Provincial and Concurrent list. In the Federal list there were 59

subjects of administration related to the centre. The Provincial list had 54 items

related to the provincial government. The Concurrent list consisting of 36

subjects was common for the central and provincial governments. These

provisions of the Act at the central level could not be implemented, but at the

provincial level, these were introduced in 1937.

Inspite of the failure of the federal provisions of, the Act, the Government

of India continued its working under the provisions of the Act of 1919 with

certain modifications, till the Indian Independence Act of 1947 came into force.

In Britain, the Labour Party came to power after the 1945 elections and initiated

49
a new approach. The imprisoned Indian leaders were set free; elections were

held to the central and provincial legislatures; and popular ministries were

restored in the provinces.

The famous Cabinet Mission Plan was published on May 16, 1946. An

interim government was formed in 1946, With Jawaharlal Nehru as its Vice-

President. The Muslim League initially declined to join the Interim government

but later agreed. Further, elections were held to the Constitutional Assembly

which met at Delhi in December 1946, but the Muslim League boycotted it, in

March Mountbatten was appointed Governor- General and in June, he

formulated his scheme for the partition of the country. On 18th July, the British

Parliament passed the Indian Independence Act, 1947 and at mid-night on 15th

August 1947. India became a free nation. The new constitution was adopted on

26th January, 1950.

A Constitution represents a higher law of the land. The civil, criminal and

other varieties of administrative laws are enacted within the parameters of this

higher law which can be amended by the sovereign Parliament of the nation. In

India, the independent judiciary is the guardian of the Constitution and its

sanctity along with fundamental rights of citizens is judicially guaranteed under

one of the fundamental rights, i.e., Right to Constitutional Remedies.

The Constitution, which was hammered out, by the veteran nationalists

and freedom fighters of the country meeting in Constituent Assembly

prescribes an institutional framework, which keeps the day-to-day adminis-

tration of the country in operation as per intentions of the legislature, directions

of the executive and overseeing of the judiciary.

50
 The administrative machinery and the administrative personnel which

work in accordance with administrative laws, rules, regulations, directions,

ordinances and codes and manuals, etc., are the creatures of subordinate law

which has to be congruent with parliamentary statues and other dictates of the

constitutional bodies.

Constitutions generally do not prescribe administrative institutions and

their working, but being a part of the executive wing of the government, the

administration has to be accountable directly as well as indirectly to higher

organs of government or even to the people of a democratic polity. The

founding fathers of Indian Constitution who freely borrowed from other

Constitutions of the world did very little to reconcile the administrative legacies

of British Raj to the constitutional system of government they wanted to

establish.

Naturally, when political institutions have been constitutionalized in a

democratic frame the administrative institutions and behaviors are taking their

time to get acculturated to political change, which is faster than administrative

change in free India. The district administration and politics about which the

Indian Constitution was meaningfully silent in 1950 has now been amended to

induct Panchayati Raj Polity in 1993 to usher into a new era of administration in

the countryside. The relationship between Constitution and administrative

system can be studied under three specific heads of the phenomenon.

1) Constitutional philosophy or value premise, which all institutions of polity,

society and government should respect, imbibe and practise in their

respective operations.

51
2) The constitutional framework within which the political institutions of

central, state and district governments work to achieve the constitutional

goals which the people keep prescribing for themselves through their

elected representatives.

3) The administrative working of the civil services and varied administrative

organisations which have to operate under the regime of rule of law and

implement the policies of the governments according to the letter and

spirit of the Constitution.

All this implies that politics and administration are the creatures of the

Constitution and hence subordinate to it. The people elect the members of

legislatures. The legislative bodies select and permit executive or cabinets to

run the government, which in turn should take the services of the administrators

to implement the law an their policies for the good governance of the people.

The legislature, executive and judiciary all the three are the best judge in

their respective spheres. But, if it is a matter of interpretation of the Constitution

then an independent and neutralist non-political judiciary has to protect and

defend the Constitution from perversion and disfigurement.

Consequently, public administration which is a subordinate branch

political executive has to work under its control and supervision, but the other

wings of government and the people who are the beneficiaries and victims of

administrative operations have a right to seek public accountability of

administration in the interest of fundamental rights (now human rights) of

citizens and welfare of the society as a whole.

52
 The Indian Constitution besides being detailed and bulky elaborately

lays down the roles of all the organs of government. It enumerates

Fundamental Rights and Duties and enjoins upon the future governments to

take care of the Directive Principles enunciated in the Constitution while

formulating and executing the state policies.

The administration of extra constitutional bodies and the infrastructure

that has proliferated must permeate with the spirit of the Constitution, which

Parliament must feel, executive should obey and the judiciary must defend and

preserve. The philosophy of the Indian Constitution can be understood from the

evolutionary landmarks of constitutional history of India since 1858. The Act

enunciated the principle of absolute imperial control of home government

without any native participation.

The provisions of the Act established a rigidly centralized unitary system

of government without any separation of functions. The Governor-General was

supposed to run the administration under the superintendence, direction and

control of the secretary of state for India with the help of a bureaucratic

apparatus. The Indian Council Act 1861 expanded the size of the Executive

Council with additional non-official member to transact legislative business of

the colony.

The subsequent installment of 1892 retained the non-official element but

created a majority of official members in the legislative council at the centre. It

was the Morley Minto reform of 1909 when the Council System was given the

semblance of a legislative body of 67 members. The electoral system though

extremely limited and absolutely communal was introduced.16

53
 The deliberative functions of the council were increased. Still, Lord

Morley firmly declined that the reform had any intention to introduce a

parliamentary form of government in India. Ten years later, when Montague

Chelmsford surveyed the scene, the constitutional framework was totally

overhauled in the light of the Queen’s proclamation of 1917.

The 1919 Act, introduced dyarchical reforms in provincial government,

bisecting the subjects into reserved and transferred. The former part was to be

controlled by the Governor with the half of his ICS advisers while the latter

transferred half was to be administered by responsible Indian minister under a

variety of restraints and constraints. The reforms relaxed central control over

provincial governments without any conscious division of federal nature.

The central legislature was made bicameral and more representative.

Even the so-called liberalisation, expansion and Indianisation did not restrain

the powers of the Governor-General and the Governors, who reduced the

entire scheme to a force. The Gandhian era witnessed all sorts of proposals

including the report of the Simon Commission, Round Table discussions,

Communal Award and Poona Pact, etc.

The Government of India Act 1935 envisaged a federal system with

provincial autonomy and diarchy in provincial and central governments

respectively. The 1935 Federation though unborn, laid the foundation of the

present constitutional arrangement in the distribution of subjects in three lists,

emergency powers of Governors and Governor-General and reservation of

seats in legislatures of the parliamentary system.

54
 The Republican Constitution of India was prepared and passed by the

Constitutional Assembly, which was constituted under the Cabinet Minister

Plan of 1945. But then its demand can be traced back to Mahatma Gandhi’s

protest movements of 1922 and Round Table discussions of 1930-31. Earlier,

the Nehru Report attempted to draw a Constitution of India under the Chair-

manship of Pandit Motilal Nehru in consultation with Ali brothers.

The failure of provincial autonomy in 1939 forced the Indian National

Congress to formulate the demand in clearer terms and Cripps’ Proposal of

1942 gave respectability to this legitimate demand of Indian. While the World

War II was on and the Japanese were knocking at the doors of India the

coalition Government of His Majesty decided to despatch veteran statesman

Sir Stafford Cripps to India to negotiate constitutional reforms with leaders of

Indian National Congress and Muslim League.

Sir Cripps unfolded his mission by presenting his proposals in the

following form :

1) That the Constitution of India was to be framed by an elected

Constituent Assembly of the Indian people;

2) That the Constitution should give India dominion status, equal

partnership of the British Commonwealth of Nations;

3) That there should be one Indian Union comprising all the provinces and

Indian states; but

55
4) That any province (or Indian state) which was not prepared to accept the

Constitution would be free to retain its constitutional position existing at

that time and with such non-accepting provinces the British government

could enter into separate constitutional arrangements.

But the two parties failed to come to an agreement to accept the

proposals. The Muslim League argued that India should be divided into two

autonomous states on communal lines, and that some of the provinces,

earmarked by Mr Jinnah, should form an independent Muslim state, to be

known as Pakistan; instead of one Constituent Assembly, there should be two

Constituent Assemblies, i.e., a separate Constituent Assembly for building

Pakistan. When Qaidi-Azam Jinnah refused to accept a maimed and moth

eaten Pakistan, Mahatma Gandhi called Cripps a Devils advocate presenting a

post-dated cheque on a crashing bank.

He advised him to take next plane home. The efforts were renewed in

1945 when the government of Earl Atlee sent a Cabinet Mission under the

leadership of Lord Pathirc Sarwence, the last Secretary of State of India. He

along with Sir Stafford and A.V. Alexander presented the Cabinet Mission Plan

in concrete details in two parts. First, the Constitution of the Constituent

Assembly on the basis of indirect election from provincial assemblies and

nomination of some members by the rulers of princely states.

There were serious differences in the perceptions of Congress and

League leaders about the details, which could not be sorted out in earlier Simla

Conference, convened by Viceroy Lord Wavell. The second part of the

proposal pertained to the guidelines of the future Constitution of India. The

56
Muslim League was sharply opposed to it, while Congress had its own

reservations about grouping of provinces.

The broad features of the scheme were :

1) There would be a Union of India, comprising both British India and the

states, and having jurisdiction over the subjects of foreign affairs,

defence and communications. All residuary powers would belong to the

provinces and the states.

2) The Union would have an executive and a legislature consisting of

representatives of the provinces and states. But any question raising a

major communal issue in the legislature would require for its decision a

majority of the representatives of the two major communities present

and voting as well as a majority of all the members present and voting.

3) The provinces would be free to form groups with executives and

legislatures, and each group would be competent to determine the

provincial subjects, which would be taken up by the group organisation.

The scheme was recommendatory, and it was contemplated by the

Mission that it would be adopted by agreement between the two major parties.

An explosive situation arose after the election for forming the Constituent

Assembly was held. The Muslim League joined the election and its candidates

were returned. But a difference of opinion had in the meantime arisen between

the Congress and the League regarding the interpretation of the ‘grouping

clauses’ of the proposals of the Cabinet Mission.

57
 The British government intervened at this stage and explained to the

leaders but League members did not attend the Constituent Assembly meeting.

The League urged for the dissolution of the Constituent Assembly on the

ground that it was not fully representative of all sections of the people of India.

The British government in a statement on 20th February 1947, declared

that British rule in India would in any case end by June 1948, after which the

British would certainly transfer authority to Indian hands; and if by that time a

fully representative Constituent Assembly failed to work out a Constitution in

accordance with the proposals made by the cabinet delegation which internal

stated.

His Majesty’s government will have to consider to whom the powers of

the Central government in British India should be handed over, on the due

date, whether as a whole to some form of Central government for British India,

or in some areas to the existing provincial government, or in such other way as

seems most reasonable and in the best interests of the Indian people.

Still the League did not consider it necessary to join this assembly, and

went on pressing for another Constituent Assembly for ‘Muslim’. The British

government responded by sending Lord Mountbatten to India as the Governor-

General, in place of Lord Wavell, to expedite transfer of power, for which they

had fixed a time limit. Lord Mountbatten brought the Congress and the League

into a definite agreement that the two ‘problem’ provinces of the Punjab and

Bengal would be partitioned so as to form absolute Hindu and Muslim majority

blocks within these provinces.

58
 The League would then get its Pakistan – which the Cabinet Mission had

denied by excluding Assam, East Punjab and West Bengal, while the Congress

which was taken a the representative of the people of India other than the

Muslims would get the rest of India where the Muslims were in minority.

The actual decisions as to whether the two provinces of the Punjab and

Bengal were to be partitioned was, however, left to the vote of the members of

the Legislative Assemblies of these two provinces, meeting in two parts,

according to a plan known as the ‘Mountbatten Plan’. It was given a formal

shape by a statement made by the British government .17

Indianization of Administration :

India became independent in August 1947 with the end of the British

rule. A new Constitution was framed and adopted on January 26 1950 and

India became a republic. The pertinent question is what was the new republic

like, and what was handed over by Britisher’s along with the power’ The answer

of these questions can be found easily during the period Britisher’s governed

the country by establishing various institutions. Though Indians were very

happy to get rid of the colonial rule it was soon realised that the governmental

system and administrative apparatus developed by the Britisher’s was capable

of meeting all the needs of the country therefore, the same administrative

system was maintained even after independence of course, with some changes

as per the requirements of the time. The main features of the British

governmental and administrative system, like parliamentary form of

government. Federal structure, governors in the states, secretariat system,

central and state administration. Civil Services, District and Regional

59
administration, the procedures of work, Rule of law, and Local government, etc.

continue to be the main points of the present Indian administrative system.

Federal Structure :

The federal structure of the Indian Constitution has its roots in the

Government of India Act of 1935. The Constitutional history of India shows, that

the Act of 1919 mentioned ‘transferred’ subjects which were entrusted to

ministers of provinces accountable to elected provincial legislatures, and

‘reserved’ subjects meant for officials under the Governors. Thus, a ‘dyarchy’

system was the main characteristic of the Act of 1919, sowing the seeds of

division of subjects between provinces and centre. The Government of India

Act 1935, added three contributions to the political development in the country:

these were: first, it established a full responsible government in the provinces,

second, it contained a list of division of powers between provinces and the

centre, third, it established a Federal Court. The Act of 1935 provided in its 451

clauses, a model for the Indian Constitution of 1950. Thus, the type of

federation we have adopted in our Constitution, is a British legacy18.

Major developments impacting administration

1. Globalization.

2. Increasing disparities.

3. Transformation of the world into a global village.

4. Deregulation and privatization trends.

5. Increasing awareness about human rights.

6. State formerly interventionist, producer, regulator and seller now called

upon to be a facilitator, promoter, and partner.

60
7. Emergence of powerful technological solutions-computers and IT.

8. Increasing expectations from the Governments to ‘perform’.

Administrative Reforms in India :

The administrative machinery of any country cannot be bereft of its social,

cultural, political and economic conditions. Since independence, India has

witnessed major developments in the social and the economic fields. The

Government today is no longer playing the traditional role of a regulator. Its role

evolved to that of a promoter and then to that of a facilitator and service

provider.

Administrative reforms have been necessitated because of :

1. Change in the role of the Government.

2. Changing environment.

3. Rising aspirations of the people.

Improving efficiency and effectiveness and Administrative Reforms in India

after independence.

Several Commissions and Committees have gone into the subject, and

suggested various measures. Major reforms have been brought about based

on the recommendations of these. Some of the important studies or reports are

as follows:

Report on Reorganisation of the Machinery of Government (1949) by Mr.

Goplaswami Ayyangar

It recommended that the Central Ministries be bunched into Bureaus and

Administrative Reforms in India after independence.

61
The Gorwala Committee appointed by the Planning Commission :

It gave a general report on Public Administration

Paul H. Appleby submitted two reports on Indian Administration :

The O & M organisation and the Indian Institute of Public Administration

were set up as a result of the recommendations.

The Committee on Prevention of Corruption was set up under

Chairmanship of Mr. K .Santhanam (MP).

The Central Vigilance Commission was set up, Administrative Reforms

in India after independence. The First Administrative Reforms Commission

(ARC) was set up in 1966. The ARC set up 20 study teams, 13 working groups

and 1 Task Force. It gave 20 Reports making a total of 581 recommendations

in a period spread over 1966-70. The First Administrative Reforms

Commission. It gave Reports on the following subjects:

1. Machinery of Government of India and its procedures.

2. Personnel Administration.

3. Redress of Citizen’s Grievances.

4. Centre-State Relations.

5. State Administration.

6. Administration of Union Territories.

7. Machinery for Planning.

8. Economic Administration.

9. Finance, Accounts and Audit.

62
10. Delegation of Financial and Administrative Powers.

11. Railways.

12. Post and Telegraph.

Studies or Reports after the First Administrative Reforms Commission :

1. Committee on Rcruitment Policy and Selection Methods (D.S.Kothari) -

1976.

2. The Commission on Centre-State Relations (Sarkaria) -1983.

3. The Fourth Central Pay Commission Report -1986

4. The Committee to Review the Scheme of the Civil Services Examination

(Satish Chandra, 1989)

5. The Economic Administration Reforms Commission.

6. The Fifth Pay Commission (1993)

7. Surendra Nath’s Committee Report (2003)

8. Committee on Civil Services Reforms.

The Second Administrative Reforms Commission: Constituted on 31st

August 2005.

Objective: To prepare a detailed blueprint for revamping the public

administration system

Terms of Reference: The Commission will inter-alia consider the

following.

1. Organisational structure of the Govt. of India.

2. Ethics in Governance.

3. Refurbishing of Personnel Administration.

63
4. Strengthening of Financial Management Systems.

5. Steps to ensure effective administration at the State level.

6. Steps to ensure effective District Administration.

7. Local Self-Government or Panchayati Raj Institutions.

8. Social Capital, Trust and participative service delivery.

9. Citizen Centric Administration.

10. Promoting e-governance.

11. Issues of Federal Polity.

12. Crisis Management.

13. Public Order.

The approach of the Second Administrative Reforms Commission :

1. A set of subjects is selected by the Commission for study.

2. Eminent National Institutions are requested to carry out studies of the

subject and help the Commission.

3. The Commission carries out Public Hearings.

4. The Commission carries out deliberations with all stakeholders.

5. Detailed consultations with the State Government.

6. He Commission carries out field visits in order to assess the ground

realities.

64
 NOTES AND REFERENCES

1. Trautmann, Thomas R. Kautilya and the Arthashastra, Leiden,

Netherlands : E.J.Brill (1971).

2. CF. Weber, Weber 1988.

3. CF, Margenthau 1978, 2012, Frei 1994, Scheuerman 2009, Reichwein

2010.

4. Bajpai, Kanti P, Mattoo, Amitabh , Securing India: strategic though and

practice, Delhi: Monahar publishers 1996.

5. Menon, Shivshankar , K. Subramanyam and India’s strategic culture in ;

Air power journal 7, 2012,1pp 1-11.

6. Kangle RP (HG). The Kautilya Arthashastra part III (commentary). Delhi

munchen oldenbourg1965.

7. Chandra Satish. Medival Indian Vol. 2, Delhi. 1997.

8. Habib Irfan. Historians of Medieval India. Meerat. 1968.

9. Hasan Mohibul. Essay in Indian History Tulika. New Delhi. 2000.

10. Madan, T.N. (ed.), Religion in India. New India, New Delhi: Oxford

University Press, 1991.

11. Mohammad Yamin; op. cit., B.C.Raoy.

12. Gyan Chand. Local Finance in India. p-35.

65
13. M.P. Sharma. Recent experiments in Local Self Government in India.

p-104.

14. Weaver. K., Ending Welfare as we know it, Washington. Dc. Brookings

Institution Press. 2000

15. Sankari Prasad singh Deo. V. union of India, AIR 195 sc 458.

16. Minorva Mills Ltd., V. Union of India 1980. SCC 625.

17. C.A. Deb, Vol- VII, 8. Nov. 1948. pp. 322-323.

18. Prof. wherare: op. cit., p.143.

66
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Student Notes:

GOVERNMENT POLICIES AND INTERVENTIONS FOR

DEVELOPMENT IN VARIOUS SECTORS AND ISSUES
ARISING OUT OF THEIR DESIGN AND
IMPLEMENTATION
Contents
1. Public Policy ...........................................................................................................................2
1.1. What is Public Policy? ......................................................................................................2
1.2. Nature of Public Policies ..................................................................................................2
1.3. Characteristics of Public Policy Formulation .....................................................................2
1.4. Types of Public Policy.......................................................................................................3
2. Public Policy in India ...............................................................................................................3
2.1. Public Policy in India after Independence .........................................................................3
2.2. Weaknesses in India’s Public Policy Making......................................................................5
2.3. Strengthening Public Policy in India .................................................................................6
2.4. Role of Civil Society in Policy Formulation and Implementation........................................6
2.5. Policy Monitoring and Evaluation.....................................................................................7
3. Major Governmental Interventions for Development in Various Sectors .................................7
3.1. Rural Development..........................................................................................................8
3.2. Urban Development ......................................................................................................12
3.3. Skill Development..........................................................................................................14
3.4. Social Security ...............................................................................................................16
3.5. Analysis by Niti Aayog’s Action Agenda 2017-20 ............................................................18
4. Democracy and Development ..............................................................................................23
4.1. Procedural Democracy and Substantive Democracy .......................................................23
4.2. Role of Democracy in Development – Appraisal and Criticism ........................................24
5. Sources ................................................................................................................................27
6. Vision IAS Test Series Questions ...........................................................................................27

Copyright © by Vision IAS

All rights are reserved. No part of this document may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without prior permission of Vision IAS

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1. Public Policy
1.1. What is Public Policy?
Public Policy is a proposed course of action of a government within a given environment
providing opportunities and obstacles which the policy aims to utilize and overcome to realize a
given role.
The above definition clearly states that public policies are governmental decisions and resultant
actions in pursuance of certain goals and objective. It requires a thoroughly close knit relation
and interaction between the important governmental agencies - the political executive,
legislature, bureaucracy and judiciary.

1.2. Nature of Public Policies

• Goal Oriented: They are goal oriented. Public policies are formulated and implemented in
order to attain the objectives which the government has in view for the ultimate benefit of
the masses in general.
• Collective actions: It is the result of government’s collective actions. It is course of activity
or' the governmental officials and actors in a collective sense than being termed as their
discrete and segregated decisions.
• Decision: Public policy is what the government actually decides or chooses to do. It can
take a variety of forms like law, ordinances, court decisions, executive orders and decisions.
• Positive/Negative: Public policy is positive in the sense that it depicts the concern of the
government and involves its action to a particular problem on which the policy is made. It
has the sanction of law and authority behind it. Negatively, it involves decisions by the
governmental officials regarding not taking any action on a particular issue.

1.3. Characteristics of Public Policy Formulation

• Complex: Policy making involves many components which are interconnected by
communication and feedback loops.
• Dynamic: It is a continuous process that requires regular input of resources and motivation.
It also changes with time.

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• Comprises of various components: Public policy formulation involves a great variety of

substructures. The identity of these substructures and the degree of their involvement in
policy making, vary because of different issues, circumstances and societal values.
• Lays down guidelines: Public policy, in most cases, lays down general directive on the main
lines of action to be followed.
• Results in action: The public policy creates apparatus and environment for action.
• Best use of possible means: Public policy making aims at achieving the maximum net
benefit. Benefits and costs take in part the form of realized values and impaired values.
• Futuristic: Policy making is directed at the future. This is one of its most important
characteristics since it introduces the ever-present elements of uncertainty and doubtful
prediction.
• Public Interest: A larger public interest guides the policy making strategy.
• Wide consultation: Industrial workers, voters, intellectuals, legislators, bureaucrats,
political parties, political executives, judiciary are the various organs that participate in
public policy making and can influence the policy process to a great extent.

1.4. Types of Public Policy

• Substantive: These are policies related to general welfare and development of the society,
the programmes like provision of education and employment opportunities, economic
stabilization, law and order enforcement, anti-pollution legislation.
• Regulatory: These are concerned with concerned with regulation of trade, business, safety
measures, public utilities. Organizations like LIC, RBI make these regulations on behalf of
the government.
• Distributive: These are meant for specific segments of society and are related to area of
grant of goods, public welfare or health services. Examples include adult education
programme, food relief, social insurance, vaccination camp etc.
• Redistributive: The Redistributive policies are concerned with the rearrangement of
policies which are concerned with bringing about basic social and economic changes.
Certain good and services that are divided disproportionally are streamlined.
• Capitalization: Under this policy, financial subsidies are given to state and local
governments by Union governments.

2. Public Policy in India

2.1. Public Policy in India after Independence
Soon after the independence, India opted for planned economic development. It was believed
that it is economic development that will usher social and political development culminating
into human development.
In a planned economy, state is perceived as active agent to promote and shape societies in
various activities with the help of public policy. This expanded the scope of public policy from
mere regulation to development. This lead to involvement of more governmental agencies and
institutions to formulate and implement policies.
In India, this role was primarily taken up by Planning Commission to formulate policies and
develop perspectives that could define the direction which country would follow. For all policy
directions, the Five Year Plans (FYP) became the major source.
The policy was of two types – for regulation and promotion. While it regulated the scope for
entrepreneurs and industrialists, the policies also promoted social change through acts like
Dowry Act and Divorce Act.

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The first major goal of public policy in India has been in the area of socio-economic
development. Major policy formulation was done in the area of industrial and agricultural
development.
In addition to socio-economic challenges, India also faced internal and external security threats.
Regionalism, for example, have risen to fissiparous tendencies. This lead to formulation of
defense policies to maintain national integration and create greater national cohesiveness.
However, formulating an all-encompassing policy in India has been a difficult process. By very
nature, policies have been contradictory. What may be rational for economic development may
not be so for national integration. Thus, the need for strong centre to cope with external
threats is important but it may go against the principle of decentralization which provides for
greater national cohesion of a heterogeneous society.
The Five Year Plans (FYPs) focused on key elements for development in India. For instance,
while 1st FYP focused primarily on agriculture, second one aimed for massive industrialization
of the country. In subsequent plans, focus areas included – industrial growth, agricultural
productivity, defense expenditure, exports, public development expenditures, poverty, rural
development, infrastructure, market reforms and social infrastructure among other things.
Achievements of planned development
• Higher rate of growth: In the pre-plan era, India was stuck in Low equilibrium trap. Later
the growth rate improved, but still lagged behind the global average and was derided as
‘Hindu growth rate’. Post LPG reforms, the growth rate improved massively. In the period
between 2002 - 2014, it also witnessed many years of double digit growth.
• Increase in national income and per capita income: Today India is 3rd largest economy in
PPP terms. Also the per capita income has seen massive jump over the decades.
• Development of Economic Infrastructure: Five-year plans laid the foundation for
development of economic infrastructure which include transportation, power generation,
communication etc.
• Social Infrastructure: Average life expectancy for both male and female has improved
substantially. Infant Mortality Rate and Maternal Mortality rate has dropped significantly.
India has been successful in eliminating debilitating disease like Polio and small pox.
• Self-sustainability in agriculture: India faced severe food scarcity in 1960s. It has to depend
upon foreign food aid. This forced government to usher in Green revolution and Operation
Flood. Currently, India produces surplus food grains.
• Savings and Interest: The saving rates were paltry 8-9% of GDP in 1950-51. Currently it is
more 30% of GDP.
• In addition to this, India became a self- sufficient economy, hot destination for foreign
investment, and witnessed development of basic and capital goods industries.
Failures of planned development
• Economic Inequality and Social Injustice: Even
after 7 decades of independence, more than 22%
of population lives below poverty line. The figure
is dismal even after the benchmark for poverty is
kept very low. While India also has 3rd largest
population of billionaire. The inequality has never
been so stark.
• Unemployment: India has witnessed the
phenomena of ‘Jobless growth’. Even after years
of being tagged as fastest growing economy, the rate of job creation is merely 2%.

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• Slow growth in production sector: Priority should have been given to the development of
agriculture in all the plans, but it was not done. Capital intensive industries in urban areas
were given precedence over small scale industries in the rural areas.
• Inefficient administration: According to an UN report, one of the short comings of plan
years has been the laggard implementation. Plans were formulated after good deal of
discussion and deliberation but their targets are not achieved due to inefficient
administration, dishonesty, vested interest and red tapism.
• No mechanism of feedback, monitoring and evaluation: All the plans were formulated by a
single body (Planning Commission) without much field studies to analyze effectiveness of
preceding plans. Also there was certain high-handedness in policy formulation with little
consultations with stakeholders like state governments.
• Standard of Living: The per capita income has not increased, while inflation has paralyzed
the life of middle and lower class. Urban space has witnessed proliferation of slums with
issues of sanitation, crime against women and child.

2.2. Weaknesses in India’s Public Policy Making

• Fragmentation in Thinking and action: There is extreme fragmentation in the structure. For
example, the transport sector is dealt with by five departments/Ministries in the
government of India whereas in the US and UK it is a part of one department. Such
fragmentation fails to recognize that actions taken in one sector have serious implications
on another and may work at cross purposes with the policies of the other sector.
• Overlap between policy
Sense and Solidarity – Jholawala Economics for everyone
making and Jean Dreze, in his new book ‘Sense and Solidarity – Jholawala
implementation: This Economics for everyone’ terms unintended consequences as one
creates a tendency to issue. He cities frequent tweaks in MGNREGS as a glaring example.
focus on operational He says in its bid to prevent officials from siphoning off wages, the
convenience rather than government started processing payments through banks and post
on public needs. In India, offices. This had the unintended effect of demotivating many local
policy making is done at officials from doing any MGNREGS-related work
director and above level.
But the most important level i.e. crucial for consideration of cross-cutting impacts is that of
the Secretaries. Also officers are more comfortable with implementation matters than with
policy making. This results in sub-optimal policies, where adequate attention has not been
paid to citizen needs.
• Over-centralization: In India, there is excessive concentration of implementation powers at
the higher levels of the Ministries.
• Lack of non-governmental inputs and informed debates: The best expertise in many
sectors lies outside the Government. Yet the policy processes and structures of Government
have no systematic means for obtaining outside inputs.
• Lack of systematic analysis and integration prior to policy making: Policy decisions are
often made without adequate analysis of costs, benefits, trade-offs and consequences.
There is a school of thought which suggests that the excessive involvement of poorly
informed generalists is the main cause of poor policy-making and implementation.
• Lack of evidence based research: Most of the times, policy formulation is carried out by
few senior bureaucrats and politicians who are not aware of prevailing ground realities.
There is no prior field study or survey is done to take macro as well as micro view of ground
realities.
• Politically motivated policies: At times, electoral considerations dominate the aims and
objectives of a policy. Frequent loan waiver by different states in India is one such example.

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Loan waiver is poor economic policy. It creates moral hazard for the farmers and puts
banking sector under stress.
• Lack of imagination: Public policy-making in India has frequently been characterized by a
failure to anticipate needs, impacts, or reactions which could have reasonably been
foreseen, thus impeding economic development. Policies have been reversed or changed
more frequently than warranted by exogenous changes or new information.

2.3. Strengthening Public Policy in India

• Reduction in fragmentation: This can be achieved by appointing fewer Secretaries. Each of
them would handle more than one of the existing sectors. This will result in more
coordination and integration in policy making as well as implementation.
• Separating policy-making from implementation and decentralizing implementation
authority: The implementation responsibilities should be entrusted to Boards and
Agencies, headed by a Director-General, in the rank of Joint Secretary or Additional
Secretary. While her/his primary responsibility would be implementation, she/he would
also provide essential inputs for policy making. Thus, she/he will act as bridge between
policy and implementation. While Secretary should concern herself/himself only to policy-
making and have no implementation responsibilities.
• Improving integration and the flow of knowledge from outside the government: There is
need to create structures which ensure the availability to policy-makers of non-
Governmental inputs and subject matter expertise. To this end, each Ministry or
Department should have a “Policy Advisory Group”. This would consist of:
o Selected top civil servants, covering related sectors.
o Stakeholder/ Industry representatives
o Academics with expertise in the field
These Policy Advisory Groups should cut across departmental viewpoints, and offer integrated
policy suggestions. Consultation of the Policy Advisory Group and a consideration of the
Group’s views would be mandatory on all policy matters, before a proposal is placed before the
Cabinet.

2.4. Role of Civil Society in Policy Formulation and Implementation

• Post-Independence till 1980s, the state had taken upon itself to formulate, implement and
evaluate social sector policies.
• However, after of globalization and liberalization, two processes unfolded. One, the role of
the State began to change and get more complex, and two, there began far greater scrutiny
of public policy from the ground.
• Attention shifted to questions of appropriate policies and structures, processes for policy
formulation, improving the competence of policymakers and evaluating policy outcomes.
• This made state look for collaborations outside state. They opened up ’policymaking to non-
State actors, for it entailed re-conceptualization of governance—from a centralized,
hierarchical and top-down traditional model of government, to a more collaborative,
horizontal structure, and a non-hierarchical setting, that had to be now based on
networking, negotiation and lobbying.
• This was based on a model of partnerships or networked governance wherein the
relationship between government and non-government, comprising market and civil
society, became the core thrust in the making of policies and delivery of public goods.
• To facilitate government-business policy networking, a plethora of new institutional
arrangements has emerged over the past decade. Like Council on Trade and Industry within
the Prime Minister’s Office and the Board of Trade in the Ministry of Commerce.

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• Notably, in most of these councils and boards, there is no representation of trade unions,
Labour federations or civil society organizations. By and large, in these emerging policy
networks formal mechanisms or spaces for involvement of civil society have been few and
far between.
• This is hardly surprising, given the critique of the neo-liberal framework from sections of
civil society, and the unease that has been the hallmark of State- civil society relations in
India where the State has towered and civil society remained at the margins.
• However, a few institutions, such as the National Advisory Council (NAC), have surfaced,
which facilitate government-civil society networking. The NAC has played a critical role in
bringing in legislations such as Right to Information, Mahatma Gandhi Rural Employment
Guarantee Act (MNREGA), among others.
• Increasingly, there is a visible change in the government’s approach to formally involve civil
society actors in policy networks. This trend is evident in all the flagship programmes of the
government, be it the MNREGA, or as reflected in the National Voluntary Sector Policy
2011, which outlines an ambitious plan of the government to engage developmental civil
society at multiple levels, from policy formulation to implementation and monitoring.
• In addition to this, implementation of the 73rd Amendment Act and the arrival of
Panchayati Raj Institutions too drove the State to actively seek partnership with civil society
actors.

2.5. Policy Monitoring and Evaluation

• A surge in public expenditure driven by economic growth has resulted in a growing demand
for monitoring and evaluation (M&E) and performance management from government,
program implementers, international donor organizations, and civil society at large.
• In the light of these imperatives, the Indian government has taken initiatives to improve the
monitoring and evaluation environment. Few of them include
o Performance Management and Evaluation System created by Cabinet Secretariat
o National Productivity Council under Department of Industrial Policy & Promotion,
Ministry of Commerce and Industry
o Ministry of Finance has instituted outcome budgeting.
o Management Information System (MIS)
o Programme Evaluation Organization (under erstwhile Planning Commission)
o Niti Aayog
• In addition to these institutions, civil society and media has also played crucial role in
evaluating governmental policies.
• In addition to the media and civil society, two more institutions, which are part of India’s
constitutional governance system, are playing a key role in demand for accountability. One
is the Comptroller and Auditor General (CAG) and the other is the Supreme Court.
• The CAG has been in the limelight for its reports exposing big corruption scandals – relating
to the 2G spectrum allocation to companies, the Commonwealth Games scams, and the
coal-mining allocations to private companies
• Similarly, the Supreme Court of India has been accepting many Public Interest Litigation
petitions from civil society and monitoring executive actions.

3. Major Governmental Interventions for Development in

Various Sectors
(This section covers the sectors of Rural Development, Urban Development, Skill Development
and Social security. The other sectors are covered in the value addition material of Social
Justice topics)

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3.1. Rural Development

Rural development involves both economic development as well as social transformation. The
Ministry of Rural Development is implementing several programs through the State
Governments to promote better prospects for economic development, aimed at poverty
reduction, rural infrastructure habitant development, provision of basic minimum services and
providing employment to marginal farmers/laborers to discourage seasonal and permanent
migration to urban areas.
3.1.1. Mahatma Gandhi National Rural Employment Guarantee Act
• The MGNREGA provides a legal guarantee for one hundred days of employment in every
financial year to adult members of any rural household willing to do public work-related
unskilled manual work at the statutory minimum wage.
• The Ministry of Rural Development (MRD), Government of India is monitoring the entire
implementation of this scheme in association with state governments
Goals
• The Strong social safety net for the vulnerable groups by providing a fall-back employment
source, when other employment alternatives are scarce or inadequate
• Growth engine for sustainable development of an agricultural economy. Through the
process of providing employment on works that address causes of chronic poverty such as
drought, deforestation and soil erosion, the Act seeks to strengthen the natural resource
base of rural livelihood and create durable assets in rural areas.
• Effectively implemented, MGNREGA has the potential to transform the geography of
poverty
• Empowerment of rural poor through the processes of a rights-based Law
• New ways of doing business, as a model of governance reform anchored on the principles
of transparency and grass root democracy Thus, MGNREGA fosters conditions for inclusive
growth ranging from basic wage security and recharging rural economy to a transformative
empowerment process of democracy
3.1.2. National Rurban Mission (NRuM)
• The Mission aims at development of rural growth clusters which have latent potential for
growth in all states. It would trigger overall development in the region.
• These clusters would be developed by provisioning of economic activities, developing skills
& local entrepreneurship and providing infrastructure amenities. The Rurban Mission will
thus develop a cluster of Smart Villages.
• The State Governments would identify the clusters in accordance with the Framework for
Implementation prepared by the Ministry of Rural Development. The clusters will be
geographically contiguous Gram Panchayats with a population of about 25000 to 50000 in
plain and coastal areas and a population of 5000 to 15000 in desert, hilly or tribal areas.
• For the selection of clusters, the Ministry is adopting a scientific process of cluster selection
which involves an objective analysis at the District, Sub District and Village level, of the
demography, economy, tourism and pilgrimage significance and transportation
corridor impact.
• The scheme through development of rurban growth clusters aimed at catalyzing overall
regional growth, would thus simultaneously benefit the rural as well as urban areas of the
country, by achieving twin objectives of strengthening rural areas and de burdening the
urban areas hence leading to balanced regional development and growth of the country.

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3.1.3. Pradhan Mantri Gramodaya Yojana (PMGY)

• The he Pradhan Mantri Gramodaya Yojana (Gramin Awaas) is based on the pattern of the
Indira Awaas Yojana and will be implemented in the rural areas throughout the country.
• The target group for houses under the scheme will be the people who are living Below the
Poverty Line in the rural areas, belonging to Scheduled Caste/Scheduled Tribes, freed
bonded laborers and non SC/ST categories
• The allotment of dwelling units will be in the name of female member of the beneficiary
household; alternatively, the dwelling unit can be allotted in the name of both husband and
wife.
3.1.4. Pradhan Mantri Ujjwala Yojana
• The scheme aimed at providing 5 crores LPG connections to BPL families. The goal had to
achieved within 3 years.
• The goal was achieved before the deadline. Before PMUY was launched, 62% Indian
households had LPG connections, now LPG coverage has extended to 85% households.
Also, 60 lakh PMUY beneficiaries have switched to LPG as primary cooking fuel.

• Pradhan Mantri LPG Panchayat: After the success of PMUY, government launched Pradhan
Mantri LPG Panchayat which is an interactive communication platform for rural LPG users
on various subjects like safe usage of LPG, its benefit to environment, women
empowerment and women health, and also to use the forum to motivate the consumers to
use LPG regularly as a clean cooking fuel.
3.1.5. Deen Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
• This scheme focuses on feeder separation (rural households & agricultural) and
strengthening of sub-transmission & distribution infrastructure including metering at all
levels in rural areas. This will help in providing round the clock power to rural households
and adequate power to agricultural consumers.
• The earlier scheme for rural electrification viz. Rajiv Gandhi Grameen Vidyutikaran Yojana
(RGGVY) has been subsumed in the new scheme as its rural electrification component.
• Out of the 18,452 villages chosen for electrification, the government claimed that 15,183
villages had been connected to the grid by December 2017.

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3.1.6. National Rural Livelihoods Mission

• Deendayal Antodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) is a flagship
programme of the Ministry of Rural Development (MoRD) that seeks to alleviate rural
poverty through building sustainable community institutions of the poor. The centrally
sponsored programme is implemented in partnership with the State governments.
• The financial year 2017-18 has seen more than 82 lakh households mobilized into 6.96 lakh
Self Help Group (SHGs) across the country. Cumulatively, more than 4.75 crore women have
been mobilized into more than 40 lakh SHGs.
• The scheme has proved to be a significant step towards financial inclusion of women in
remote areas.
3.1.7. Mission Antodaya
• The mission seeks to converge government interventions with Gram Panchayats as the
basic unit for planning by following a saturation approach by pooling resources - human
and financial - to ensure sustainable livelihoods.
• It is a State - led initiative for rural transformation to make a real difference based on
measurable outcomes to the lives of 1,00,00,000 households in 5,000 rural clusters or
50,000 Gram Panchayats in 1,000 days.
• Public institutions like Krishi Vigyan Kendras, MSME Clusters, other Skill Development
Institutions are involved in developing the fullest potential of these clusters for enhancing
productive employment and economic activities.
• The potential of these clusters, inter alia, could be in organic agriculture, horticulture,
manufacturing, services, tourism, etc.
• Even the private sector, especially young CEOs, Start Ups and Corporate Social
Responsibility Initiatives are being invited to join the movement for making Panchayats
Poverty free through enhanced livelihood diversification and market linkages.
3.1.8. Pradhan Mantri Gram Sadak Yojna
• The Rural Road Connectivity is not only a key component of Rural Development by
promoting access to economic and social services and thereby generating increased
agricultural incomes and productive employment opportunities in India, it is also as a
result, a key ingredient in ensuring sustainable poverty reduction.
• The Government have launched the Pradhan Mantri Gram Sadak Yojana on 25th December,
2000 to provide all-weather access to unconnected habitations. The Pradhan Mantri Gram
Sadak Yojana (PMGSY) is a 100% Centrally Sponsored Scheme. 50% of the Cess on High
Speed Diesel (HSD) is earmarked for this Programme.
• The Government has brought forward the target date by three years from 2022 to 2019 to
achieve complete rural connectivity through all-weather roads under Pradhan Mantri Gram
Sadak Yojana, PMGSY. This accelerated implementation will be achieved by providing
enhanced financial allocation and through a modified funding pattern in the Scheme.
• The PMGSY shall cover only the rural areas. Urban roads are excluded from the purview of
this Programme. Even in the rural areas, PMGSY covers only the Rural Roads i.e., Roads that
were formerly classified as ‘Other District Roads’ (ODR) and ‘Village Roads’ (VR).
3.1.9. Sansad Adarsh Gram Yojna
• Sansad Adarsh Gram Yojana (SAGY) is a village development project launched by
Government of India in October 2014, under which each Member of Parliament will take
the responsibility of developing physical and institutional infrastructure in three villages by
2019.

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• The goal is to develop three Adarsh Grams by March 2019, of which one would be achieved
by 2016. Thereafter, five such Adarsh Grams (one per year) will be selected and developed
by 2024.
• Far beyond mere infrastructure development, SAGY aims at instilling certain values in the
villages and their people so that they get transformed into models for others

3.1.10. Pradhan Mantri Awaas Yojna

• In pursuance to the goal - Housing for all by 2022, the rural housing scheme Indira Awas
Yojana has been revamped to Pradhan Mantri Awaas Yojana – Gramin and approved during
March 2016.
• Under the scheme, financial assistance is provided for construction of pucca house to all
houseless and households living in dilapidated houses. It is proposed that one crore
households would be provided assistance for construction of pucca house under the project
during the period from 2016-17 to 2018-19.
• The scheme would be implemented in rural areas throughout India except Delhi and
Chandigarh. The cost of houses would be shared between Centre and States.
• Identification of beneficiaries eligible for assistance and their prioritization to be done using
information from Socio Economic and Caste Census (SECC) ensuring total transparency and
objectivity. The list will be presented to Gram Sabha to identify beneficiaries who have been
assisted before or who have become ineligible due to other reasons.
• The Under PMAY, the cost of unit assistance is to be shared between Central and State
Governments in the ratio 60:40 in plain areas and 90:10 for North Eastern and hilly states.
3.1.11. Gram Swaraj Abhiyan
• The campaign, undertaken under the name of “Sabka Sath, Sabka Gaon, Sabka Vikas”, is to
promote social harmony, spread awareness about pro-poor initiatives of government, reach
out to poor households to enroll them as also to obtain their feedback on various welfare
programmes.
• As a special endeavour during the Gram Swaraj Abhiyan, saturation of eligible
households/persons would be made under seven flagship pro-poor programmes in 21,058
identified villages, namely - Pradhan Mantri Ujjwala Yojana, Saubhagya, Ujala scheme,
Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan
Mantri Suraksha Bima Yojana and Mission Indradhanush.

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3.2. Urban Development

India has the second largest urban population in the world and by 2050, around 50% of India’s
population i.e. 814 million is expected to live in urban areas. Given this scenario, the present
infrastructure and amenities in cities and towns are not adequate to address the expanding
urbanization process.
Several initiatives were launched by the government to promote urban infrastructure in the
country. Major initiative is the twin effort of Smart Cities Mission and the AMRUT scheme.
3.2.1. The Smart Cities Mission
• The Smart Cities Mission is a major urban renewal program launched by the Government to
develop and upgrade living conditions and infrastructure in selected 100 cities all over the
country.
• Objective of the programme is to modernize cities by providing core infrastructure and give
a decent quality of life to its citizens, a clean and sustainable environment and application
of ‘Smart’ Solutions.
• The programme was officially launched on 25 th of June 2016 and in the first phase, 20 cities
will get funding for converting them into smart cities. In the next two years, the remaining
cities will also participate in the project. Ministry of Urban Development is the anchoring
agency for the implementation of the project.
• The main focus of the project is the area based development of cities by transforming
existing areas through retrofitting and redevelopment.
• Another component of the smart cities project is the development of new areas or
greenfield areas. Similarly, adoption of Smart Solutions with the use technology,
information and data are expected to improve infrastructure and services under the
project.
Financing of smart cities mission
• Financing of the mission will
be collaboratively done by
the Centre, state and local
bodies. Fund from the
private sector will be invited
and Public Private
Partnerships will support the
project financially.
• The most vital contribution
will be provided by the
centre as it will
provide Rs. 48,000 crores
over five years i.e. on an
average Rs. 100 crore per city per year. Matching the center’s contribution, an equal
amount will be made by the State/ULBs. Altogether nearly one lakh crore rupees from
government sources will be available for Smart Cities Project. For the implementation of
the project each city should form a dedicated Special Purpose Vehicle (SPV).
3.2.2. Atal Mission for Rejuvenation and Urban Transformation (AMRUT) Project
• Atal Mission for Rejuvenation and Urban Transformation (AMRUT) along with smart cities
were jointly planned and launched by the government to transform urban living conditions
through infrastructure upgradation.

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• AMRUT is aimed at transforming 500 cities and towns into efficient urban living spaces over
a period of five years. Ministry of Urban Development has selected the five hundred cities
with the help of state governments.
• A project oriented development approach is adopted under the scheme in contrast to the
area based approach of Smart Cities Mission.
• The Cabinet approved Rs 50,000 crore for this mission which is to be spent over a period
five years. This is a centrally sponsored scheme with 80% budgetary support from the
Centre.
• Mission of AMRUT is to (i) ensure that every household has access to a tap with assured
supply of water and a sewerage connection; (ii) increase the amenity value of cities by
developing greenery and well maintained open spaces (e.g. parks); and (iii) reduce pollution
by switching to public transport or constructing facilities for non-motorized transport (e.g.
walking and cycling).

SDG and Urban Development

Goal IX: To make cities inclusive, safe and resilient
• By 2030, ensure access for all to adequate, safe and affordable housing and basic
services and upgrade slums
• By 2030, provide access to safe, affordable, accessible and sustainable transport systems
for all, improving road safety, notably by expanding public transport, with special
attention to the needs of those in vulnerable situations: women, children, persons with
disabilities and older persons
• By 2030, enhance inclusive and sustainable urbanisation and capacity for participatory,
integrated and sustainable human settlement planning and management in all
countries
• Strengthen efforts to protect and safeguard the world’s cultural and natural heritage
• By 2030, significantly reduce the number of deaths and the number of people affected
and substantially decrease the direct economic losses relative to global gross domestic
product caused by disasters, including water-related disasters, with a focus on
protecting the poor and people in vulnerable situations
• By 2030, reduce the adverse per capita environmental impact of cities, by paying special
attention to air quality and municipal and other waste management
• By 2030, provide universal access to safe, inclusive and accessible green and public
spaces, in particular for women and children, older persons and persons with disabilities
• Support positive economic, social and environmental links between urban, peri-urban
and rural areas by strengthening national and regional development planning
• By 2020, substantially increase the number of cities and human settlements adopting
and implementing integrated policies and plans towards inclusion, resource efficiency,
mitigation and adaptation to climate change, resilience to disasters, and develop and
implement, in line with the Sendai Framework for Disaster Risk Reduction 2015-2030,
holistic disaster risk management at all levels
• Support least developed countries, through financial and technical assistance, in
building sustainable and resilient buildings, and utilising local materials.
3.2.3. Pradhan Mantri Awas Yojana (Urban) or Housing for All by 2022 Mission
• The ‘Housing for All by 2022’ under the scheme of “Pradhan Mantri Awas Yojana – Housing
for All (Urban)” launched by the central government aims to provide housing to all urban
people by 2022.
• It provides central assistance to States and UTs for constructing houses to all eligible
sections by concentrating on urban slums and economically weaker sections. Hence, slum

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rehabilitation and affordable housing to Economically Weaker Sections are the major
features of the project.
• The programme has following components:
o Slum rehabilitation of Slum Dwellers with participation of private developers using land
as a resource;
o Promotion of Affordable Housing for weaker section through credit linked subsidy;
o Affordable housing in partnership with Public & Private sectors and
o Subsidy for beneficiary-led individual house construction or enhancement.
3.2.4. Heritage City Development and Augmentation Yojana (HRIDAY)
• The HRIDAY scheme is launched for the holistic development of heritage cities. It aims to
preserve and revitalize the unique character of heritage cities in India.
• For the first phase of the programme Rs. 500 crore is allocated with full funding by the
central government. Twelve cities—including Ajmer, Amaravati, Amritsar etc. are identified
for the project.

3.3. Skill Development

3.3.1. Pradhan Mantri Kaushal Vikas Yojna
• It is the flagship scheme of the Ministry of Skill Development & Entrepreneurship (MSDE).
The objective of this Skill Certification Scheme is to enable a large number of Indian youth
to take up industry-relevant skill training that will help them in securing a better livelihood.
• Individuals with prior learning experience or skills will also be assessed and certified under
Recognition of Prior Learning (RPL). Under this Scheme, Training and Assessment fees are
completely paid by the Government.
• The scheme is implemented through National Skill Development Corporation (NSDC).
• In addition, Central / State Government affiliated training providers would also be used for
training under the scheme.
• Training also includes soft skills, personal grooming, behavioral change for cleanliness, good
work ethics.
3.3.2. Deen Dayal Upadhyaya Grameen Kaushalya Yojana
• According to Census 2011, India has 55 million potential workers between the ages of 15
and 35 years in rural areas. At the same time, the world is expected to face a shortage of 57
million workers by 2020.
• This presents a historic opportunity for India to transform its demographic surplus into a
demographic dividend.
• The Ministry of Rural Development implements DDU-GKY to drive this national agenda for
inclusive growth, by developing skills and productive capacity of the rural youth from poor
families.
• There are several challenges preventing India’s rural poor from competing in the modern
market, such as the lack of formal education and marketable skills. DDU-GKY bridges this
gap by funding training projects benchmarked to global standards, with an emphasis on
placement, retention, career progression and foreign placement.
Features
• Enable Poor and Marginalized to Access Benefits: Demand led skill training at no cost to
the rural poor.
• Inclusive Program Design: Mandatory coverage of socially disadvantaged groups (SC/ST
50%; Minority 15%; Women 33%).

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• Shifting Emphasis from Training to Career Progression: Pioneers in providing incentives for
job retention, career progression and foreign placements.
• Greater Support for Placed Candidates: Post-placement support, migration support and
alumni network.
• Proactive Approach to Build Placement Partnerships: Guaranteed Placement for at least
75% trained candidates.
• Enhancing the Capacity of Implementation Partners: Nurturing new training service
providers and developing their skills.
• Regional Focus:
o Greater emphasis on projects for poor rural youth in Jammu and Kashmir (HIMAYAT)
o The North-East region and 27 Left-Wing Extremist (LWE) districts (ROSHINI)
• Standards-led Delivery: All program activities are subject to Standard Operating Procedures
that are not open to interpretation by local inspectors. All inspections are supported by
geo-tagged, time stamped videos/photographs.
3.3.3. Financial Assistance for Skill Training of Persons with Disabilities
• The Scheme aims at providing financial assistance for skill training for persons with
disabilities.
• The scheme covers Persons with Disabilities (PwDs) with not less than 40% disability and
having a disability certificate to this effect issued by a competent medical authority.
• 30% reservation for women candidates: As an endeavor to encourage women, 30% of the
total intake of each training program shall be earmarked for women candidates.
3.3.4. National Apprenticeship Promotion Scheme
• National Apprenticeship Promotion Scheme aims to promote apprenticeship training in the
country.
• Objective: The main objective of the scheme is to promote apprenticeship training and to
increase the engagement of apprentices from present 2.3 lakh to 50 lakh cumulatively by
2020.
• Scope: The scheme covers all categories of apprentices except the Graduate, Technician and
Technician (Vocational) apprentices which are covered by the scheme administered by
Ministry of Human Resource Development.
• Implementing Agency: Regional Directorates of Apprenticeship Training (RDATs) under the
control of Directorate General of Training act as implementing agencies in their regions for
Central Public Sector Undertaking and establishments operating their business in 4 or more
States. State Apprenticeship Advisers act as implementing agencies for state public sector
and private establishments under their jurisdiction.
3.3.5. Skill Development for Minorities
Following are the few schemes implemented by Ministry of Minority Affairs that aim for skill
development.
• Seekho aur Kamao (Learn & Earn): This is a placement linked skill development scheme
implemented since 2013-14 for minorities aiming to upgrade the skills of minority youth in
various modern/traditional skills depending upon their qualification, present economic
trends and market potential, which can earn them suitable employment or make them
suitably skilled to go for self-employment
• USTTAD (Upgrading the Skills and Training in Traditional Arts/ Crafts for Development):
This aims to preserve the rich heritage of traditional arts/crafts of minorities.
• Nai Manzil: The scheme aims to benefit the minority youth who do not have a formal
school leaving certificate, in order to provide them formal education and skills and enable

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them to seek better employment in the organized sector and thus to equip them for better
lives.
• Maulana Azad National Academy for Skills (MANAS): MANAS provides an all India level
training framework based upon tie-ups with Local/National/International training
organizations on PPP model, for imparting training to the Minority population in skill sets
that are in line with emerging market demand.

3.4. Social Security

3.4.1. National Social Assistance Program
• The National Social Assistance Programme (NSAP) represents a significant step towards the
fulfillment of the Directive Principles in Article 41 and 42 of the Constitution recognizing the
concurrent responsibility of the Central and the State Governments in the matter.
• In particular, Article 41 of the Constitution of India directs the State to provide public
assistance to its citizens in case of unemployment, old age, sickness and disablement and in
other cases of undeserved want within the limit of its economic capacity and development.
• National Social Assistance Programme is a social security and welfare programme to
provide support to aged persons, widows, disabled persons and bereaved families on death
of primary bread winner, belonging to below poverty line households.
• The NSAP at its inception in 1995 had three components namely
o National Old Age Pension Scheme (NOAPS)
o National Family Benefit Scheme (NFBS)
o National Maternity Benefit Scheme (NMBS)
3.4.2. National Pension System
• The National Pension System (NPS) is a voluntary, defined contribution retirement savings
scheme designed to enable the subscribers to make optimum decisions regarding their
future through systematic savings during their working life.
• NPS seeks to inculcate the habit of saving for retirement amongst the citizens. It is an
attempt towards finding a sustainable solution to the problem of providing adequate
retirement income to every citizen of India.
• Under the NPS, individual savings are pooled in to a pension fund which are invested by
PFRDA regulated professional fund managers as per the approved investment guidelines in
to the diversified portfolios comprising of government bonds, bills, corporate debentures
and shares.
• These contributions would grow and accumulate over the years, depending on the returns
earned on the investment made.
• At the time of normal exit from NPS, the subscribers may use the accumulated pension
wealth under the scheme to purchase a life annuity from a PFRDA empanelled life
insurance company apart from withdrawing a part of the accumulated pension wealth as
lump-sum, if they choose so.
3.4.3. Atal Pension Yojna
• Atal Pension Yojana (APY) addresses the old age income security of the working poor and
the longevity risks among the workers in unorganised sector. It encourages the workers in
unorganised sector to voluntarily save for their retirement.
Benefits:
• Fixed pension for the subscribers ranging between Rs.1000 to Rs.5000, if she or he joins
and contributes between the age of 18 years and 40 years.
• The same pension is payable to Spouse after death of subscriber.

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• Return of indicative pension wealth to nominees after death of spouse.

• Contributions to the Atal Pension Yojana (APY) is eligible for tax benefits similar to the
National Pension System (NPS)
3.4.4. Pradhan Mantri Jeevan Jyoti Bima Yojna
• It is available to people in the age group of 18 to 50 and having a bank account.
• People who join the scheme before completing 50 years can, however, continue to have the
risk of life cover up to the age of 55 years’ subject to payment of premium.
• Risk covers Rs.2 Lakh in case of death for any reason.
3.4.5. Pradhan Mantri Suraksha Bima Yojna
• It is available to people in age group 18 to 70 years with bank account. With a premium of
Rs. 12 per annum, it covers following risks:
o Death Death - Rs 2 Lakh
o Total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of
sight of one eye and loss of use of hand or foot – 2 Lakh.
o Total and irrecoverable loss of sight of one eye or loss of use of one hand or foot – 1
Lakh.
3.4.6. National Food Security Act, 2013
• The objective of the act to provide for food and nutritional security in human life cycle
approach, by ensuring access to adequate quantity of quality food at affordable prices to
people to live a life with dignity.
Salient Features of the act:
• Coverage and entitlement under Targeted Public Distribution System (TPDS): Up to 75% of
the rural population and 50% of the urban population is covered under TPDS, with uniform
entitlement of 5 kg per person per month. However, since Antyodaya Anna Yojana (AAY)
households constitute poorest of the poor, and are presently entitled to 35 kg per
household per month, entitlement of existing AAY households will be protected at 35 kg per
household per month.
• State-wise coverage: An all India coverage of 75% and 50% in the rural and urban areas is
envisaged. The then Planning Commission (now NITI Aayog) has determined the State-wise
coverage by using the NSS Household Consumption Survey data for 2011-12.
• Subsidized prices under TPDS and their revision: Food grains under TPDS is made available
at subsidized prices of Rs. 3/2/1 per kg for rice, wheat and coarse grains for a period of
three years from the date of commencement of the Act.
• Identification of Households: Within the coverage under TPDS determined for each state,
the work of identification of eligible households is done by States/UTs.
• Nutritional Support to women and children: Pregnant women and lactating mothers and
children in the age group of 6 months to 14 years are entitled to meals as per prescribed
nutritional norms under Integrated Child Development Services (ICDS) and Mid-Day Meal
(MDM) schemes. Higher nutritional norms have been prescribed for malnourished children
up to 6 years of age.
• Maternity Benefit: Pregnant women and lactating mothers are also entitled to receive
maternity benefit of not less than Rs. 6,000.
• Women Empowerment: Eldest woman of the household of age 18 years or above to be the
head of the household for the purpose of issuing of ration cards.
• Grievance Redressal Mechanism: Grievance redressal mechanism at the District and State
levels. States will have the flexibility to use the existing machinery or set up separate
mechanism.

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• Cost of intra-State transportation & handling of food grains and FPS Dealers'
margin: Central Government provide assistance to States in meeting the expenditure
incurred by them on transportation of food grains within the State and handling.
• Transparency and Accountability: Provisions have been made for disclosure of records
relating to PDS, social audits and setting up of Vigilance Committees in order to ensure
transparency and accountability.
• Food Security Allowance: Provision for food security allowance to entitled beneficiaries in
case of non-supply of entitled food grains or meals.
• Penalty: Provision for penalty on public servant or authority, to be imposed by the State
Food Commission, in case of failure to comply with the relief recommended by the District
Grievance Redressal Officer.

3.5. Analysis by Niti Aayog’s Action Agenda 2017-20

NITI Aayog’s ‘India: Three Year Action Agenda 2017-18 to 2019-20’ outlines its vision of India
across all sectors. It aims to better align the development strategy with the changed reality of
India. Following are the analysis and recommendations of Three Year Action Agenda in the
sectors discussed above.
3.5.1. Rural Development
• The rural landscape has been transforming with a clear distinction between rural and urban
areas disappearing. This has resulted into more integrated economy.
• Job creation, however, has not kept pace with the shift from agriculture towards non-farm
sectors. Other challenges facing rural areas include low literacy levels, inadequate access to
health, drinking water and sanitation as well as insufficient linkages with and use of formal
financial institutions.
Schemes and Transparency in implementation
• As SECC 2011 has become the basis for determining beneficiary level entitlements for
several programs, there is need for institutional mechanism to update data on regular basis.
• This data could be analyzed at the Panchayat Levels to ensure convergence among schemes
for addressing the challenge of multi-dimensional poverty faced by the vulnerable
households.
• The State Institutes of Rural Development (SIRD) could play important role in facilitating this
convergence as they are responsible for implementation of various programs of rural
development and training of the representatives at the Panchayat level.
• GIS should be used to track assets and houses created under MGNREGA and Pradhan
Mantri Awas Yojna.
Skill Development and Employment Generation
• Common Review Mission (CRM) constituted by Ministry of Rural Development (MoRD) in
2016 revealed implementation challenges related to Deen Dayal Antodaya Yojna – National
Rural Livelihood Mission (DAY – NRLM). Human Resource issues and lack of funds were
major challenges.
• Human Resource Challenges: Efforts should be done to ensure longer term for CEOs of
State Rural Livelihood Missions (SRLM). Emphasis should be placed to retain project staff at
district and block level.
• CRM team found out that the program has been successful in achieving SHG- Bank linkages,
more efforts are needed for forming and strengthening Producers Group and Producers
Companies in areas like sustainable agriculture and non –timber forests products.

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• A mechanism for measuring key indicators for SHGs including household savings, income,
asset creation, debt reduction and productivity needs to be developed.
• With respect to Deen Dayal Upadhyaya Grameen Kaushlaya Yojna (DDU –GKY), the focus
should be on monitoring and improving the quality of placements.
Sub – group of Chief Ministers on Skill Development recommendation on DDU – GKY and
NRLM:
• Modify operational guidelines to include self-employment in agriculture and allied
vocations at par with placement in a job.
• Need for leveraging Recognition to Prior Learning (RPL) under the National Skills
Qualification Framework (NSQF). All state departments should develop plans for
assessment and certification of semi-skilled and skilled worker in agriculture and allied
fields by the Agriculture Skill Council of India (ASCI).
MGNREGA
• There is need to strengthen monitoring over the next 3 years. Additionally, social audit
facilitated by an independent unit should be made compulsory.
• Due to lack of maintenance, assets under MGREGA becomes unusable over time. Thus,
there is need to create a separate maintenance fund for community assets created under
MGNREGA.
• All technical Staff vacancies need to be filled and the personnel should have adequate
capacity to supervise assets created under the scheme.
• Data indicates that the benefits of MGREGA have been disproportionately reaped by few
states. Therefore, there is need for developing a set of inclusion, exclusion and deprivation
criteria to target the program in favour of the poorest households.
Housing
• To meet the goal of Housing for All by 2022, there is need to develop state specific plans
along with work schedules and explicitly defined targets. The plan should involve various
types of low cost and disaster resilient housing models that can use materials found in
various parts of the country.
• Another priority is to ensure that the funds are released on timely manner based on
evidences of completion of each stage of the projects. The monitoring mechanism should
be strengthened by the introduction of geo-tagged photographs of house construction as
well as compulsory social audits.
• Recently cabinet has approved provisions of interest subsidy to every household that is not
covered under PMAY –G. There is need to converge these provisions with PMAY –G.
Drinking Water and Sanitation
• To make India Open Defecation Free by 2019, 55 million household toilets and 115, 000
community toilets need to be built under Swachh Bharat Abhiyan – Gramin. Special
attention should be paid to address the inequalities with respect to sanitation access to
women, children, senior citizens and differently abled.
• Sub –group of Chief Ministers have recommended to engage a professional agency to
monitor and evaluate and extensive media campaign which encourage people to maintain
and use toilets as well as pay for the use of public toilets.
• There is need to make comprehensive analysis to assess why the Community Led Total
Sanitation (CLTS) program which has been successful in other countries and states like
Himachal Pradesh has not been scaled up at national level in India.
• Another priority should be to train and incentivize a cadre of community based sanitation
workers or Swacchta Doots as envisaged in the Swachh Bharat Mission.

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Energy
• To achieve the goal of electrifying every households in rural India under Deen Dayal
Upadhyaya Gram Jyoti Yojna, there is need to focus on quality, reliability, affordability and
legality of the supply in the absence of which electrification would not necessarily translate
into rural households getting real power.
• Introduction of GARV – a dashboard and mobile app for making data available to the public
on the real time basis will bring transparency.
• Further, 50 million BPL households, majority of which reside in rural India should get access
to LPG under PM Ujjwala Yojna.
Road
• Over the three years, the goals should be to connect all rural roads to all weather roads
constructed under PM Gram Sadak Yojna. In this regard, Comptroller and Auditor General
of India has made few recommendations:
o There is need to create GIS data base on rural roads.
o Discrepancies and deficiency in District Rural Road Plan needs to be addressed.
o Quality control and monitoring needs to be highlighted.
o Data captured in the Online Management, Monitoring and Accounting System
(OMMAS) should be updated on the regular basis.
Digital Connectivity and Literacy
• Along with improving connectivity, ensuring digital literacy is also crucial. In this regard, PM
Digital Saksharta Abhiyan (PMDISHA) to make 6 crores rural households digitally literate is
an important step.
• It will help them in widespread use of JAM Trinity.

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Panchayats for strong local governance

• Panchayat buildings should be equipped with requisite facilities including electricity and
computers with functional internet connections.
• States should confer on the Panchayats full administrative and financial control over the
staff working with them. They should also have the authority to recruit the staff.
• According to Annual study on the Panchayat Devolution Index (PDI) conducted by Ministry
of Panchayati Raj highlighted above mentioned reasons for better perfomrace of some
states.
• Panchayats should be supported for acquiring ISO certification. For instance, Kerela Has
been ranking no. 1 in PDI as Local Self-government Department has extended support for
bringing panchayats under ISO class.
3.5.2. Urban Development
Urban Housing
• The most important issue is high cost of lands, which in result affects availability of
affordable housing.
• According to Niti Aayog, 4 supply side factors have contributed to the artificially high urban
property values in India.
o Large pieces of land are tied up in litigation
o Many sick PSEs own large pieces of unused land in prime urban areas
o Central & state government own substantial urban land that remains unused or
encroached.
o Land Acquisition Act, 2013 fixes compensation at higher rate. It makes housing projects
unaffordable.
• Niti Aayog offers following solutions to these issues:
o Expedite resolution process of tied lands.
o Close these PSEs (Already under process)
o Monetize these urban lands to finance infrastructure & other critical expenditures.
o Amend the act
• In addition to this, there is issue of stringent land laws/rules. Vast tracts of lands are lying
unused on the periphery of the urban space. But to use these lands, it needs to be
converted from agricultural to non-agricultural land. But state revenue departments are
reluctant to do so.
• The scarcity of horizontal space should be countered by vertical expansion. Unfortunately,
Floor Space Index (FSI) permitted is very low – ranging from 1 to 1.5. Thus tall buildings are
absent in India. There is need to relax permitted FSI.
Low Rent Housing
• Ultra high land prices lead to low rental yields which in return act as a barrier to the
emergence of institutional investors in low rent housing. Also according to Census 2011,
about 11.09 million urban properties remained vacant across India.
• In most states, rent control laws disproportionally protect the tenet. Rent is kept at low
level and eviction is difficult. This leads to paradoxical situation of unsatisfied demand for
rental housing while many units lie vacant.
• There is need for replacing current rent control laws by modern tenancy law, which would
give full freedom to tenant and owner to negotiate the rent and length of the law. In 2015,
Ministry of Housing and Urban Poverty alleviation drafted Model Tenancy Law.
• Without correction of land prices, rental yields will remain low. Reform of land markets to
better align the rental yields to the interest rate remains critical to low-rent commercial
housing.

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• Ownership Titles: In a longer run, there is also need for legislation providing for conclusive
ownership titles giving protection to the owners. Rajasthan is the only state that passed
legislation in this regard.
• Dormitory Housing: It will address the housing woes of migrant workers who come to cities
without families. It will also discourage the growth of slums.
• Rental Voucher Scheme: The government is considering a rental voucher scheme for the
urban poor in 100 smart cities. In view of the fact that urban poor receive very limited
government, this scheme is an important positive step.
Urban Sanitation (Swachh Bharat)
• Municipal Solid Waste (MSW) Disposal: Mountains of waste which lie around all cities in
India is a serious public health issue. On the methods of final disposal, options such as
Biogas and composting are not sustainable solutions in larger cities since they generate by-
products and residues in high volumes.
• Only incineration, also called Waste to Energy, thermal pyrolysis and plasma gasification
technologies offer sustainable disposal solutions. Considering India’s highly diverse waste
generation and high cost of plasma technology, incineration offers best solution.
• Report of the Sub- group of Chief Ministers on Swachh Bharat Abhiyan, recommends
Waste to Energy Plants in big municipalities and cluster of municipalities and composting
method of waste disposal for smaller towns and rural areas.
• Niti Aayog also recommends setting up an authority named Waste to Energy Corporation
of India (WECI), on the lines of National Highway Authority of India.
Urban Transport
• Indian roads are notorious for being pedestrian unfriendly, poorly surfaced, congested and
constantly dug up. An important and urgent transformational reform is to draw up national
design standards and contracting standards for city roads to address these challenges.
• The flow of traffic also needs to special attention in Indian cities. Unlike western cities,
motorized vehicles in India change lanes with high frequency and in unpredictable ways.
Niti Aayog recommends running pilot projects to see if strict enforcement of traffic rules
through fines in case of violations can induce behavioral change and persuade drivers to the
benefits of obeying all rules.
• Metro rails has proved to be an efficient source of public transportation in Indian cities.
This highlights the need for a National Metro Rail Policy that will ensure that metro
projects are not run is isolation, but under overall national transportation plan.
3.5.3. Skill Development
• According to estimates, only about 2.3% of the Indian population have undergone formal
skill training as compared to UK 68%, Germany’s 75%, USA’s 52% , Japan’s 80% and South
Korea’s 96%.
• Creation of new ministry of skill development marked a paradigm towards a new trajectory.
The Skill India initiative aims to impart skills into 50 crores Indians by 2022. In addition to
this, number of schemes and policies have been initiated.
• But mere promulgation of schemes is not enough. It is estimated that our demographic
divided will last for only 25 years. Thus, India needs to significantly scale up its skill
development initiatives ensuring quality and speed with efforts from both public and
private sectors.
• Apprenticeship is an effective method for skill development as they offer efficient industry
relevant training.

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• In India, we do not have independent regulator overseeing various skill development

initiatives. Ministry of Skill Development and Entrepreneurship (MSDE) is acting as both
policy setting and regulatory body. The next step should be to set up an independent
regulatory body at arm’s length distance from the government.
• According to Skill Development Achievements Report, 2016 the placement rate of those
skilled under government schemes is less than 50%. It should be enhanced to 80% over
next three years.
• Following indicators should be used to report on the aggregate performance of the NSDC
o Per Cent of certified candidates employed
o Longevity of certified candidates in their chosen job field.
o Wage difference between certified and unskilled candidates.
o Number of entrepreneurs created through the vocational training ecosystem.
o No. of certified candidates employed on overseas vocational jobs.
• A National Level Overseas Employment Promotion Agency (OEPA) should be set up under
MEA to consolidate all promotional activity of the government.
• The skills and expertise of the Indians living abroad or returning should be recognized and
exploited. Further, there should be separate focus on the skills developed by foreign
immigrants in India as they offer global experiences and perspectives.
• In addition to Recognition of Prior Learning, special focus should be on the identification of
transferrable skills.
• The role of NSDC needs to delineated better. Currently most of the NSDC’s bandwidth is
consumed by managing PMKVY which primarily does not address higher levels of skills or
market led non-sponsored skilling program. There is need to set up a dedicated cell for
PMKVY so that NSDC has focus on its envisaged role.

4. Democracy and Development

4.1. Procedural Democracy and Substantive Democracy
India opted for the parliamentary form of government in order to make the nation-state based
on the principles of universal adult franchise and periodic election in contrast to the village-
level government in the light of Gandhian principles.
The assessment of democracy
depends on the indices used to
indicate or measure it. There are
mainly two models of indices
regarding democracy - first related
to the institutional minimal i.e.
procedural democracy and second
related to the substantive or
effective democracy.
Procedural Democracy
• The observers of the procedural
democracy largely believe that
democracy in India has been
successful. The criteria for this assessment are - participation and competition. These are
indicated by the frequency of the elections in India and competition among political parties
to contest elections.
• Procedural democracy was meant to contribute to the nation-building in India. Theorists
believe that universal adult franchise and periodic elections usher modernization process. It

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would be accompanied with socio-economic modernization, urbanization, spread of mass

media, education, wealth and equality.
• It was believed that development in India would strengthen democracy and divisions based
on caste and religion would disappear.
• But these hopes were belied in 1960s and 70s. The decade of 1960s witnessed recurrent
episodes of linguistic and ethnic violence. Unable to meet the challenge democratically the
political executive responded to these by authoritarianism, personalization of the
institutions and imposition. Imposition of emergency was one such example.
Substantive Democracy
• Believers of this form of democracy highlighted that elections and universal adult franchise
are not sufficient conditions for democracy. Democracy has to be situated in the society
and has to be taken out from institutional mode.
• The rise of identity politics – dalits, OBCs, women, tribal, ethnicity and environment – have
necessitated the focus on substantive democracy. This is viewed both as a challenge to the
nation-state and as an increase in the democratic content of the country.
• With the introduction of 73rd and 74th Constitutional Amendments, the decentralization has
been democratized and the scope of democracy has expanded to include the women, OBCs
and dalits at the grass root level.
• This is an attempt to change ‘top – bottom’ to ‘bottom – top’ democracy.

4.2. Role of Democracy in Development – Appraisal and Criticism

Are democracy and development compatible?
To most global theorist of democracy, India is an embarrassing anomaly. They believed that
democracy in India should not have survived as it is marred with massive poverty, largely rural
and uneducated population, weak civic institutions, wealth inequality and social divisions like
caste, regionalism and communalism. Yet India has proved to be a remarkably resilient
democratic polity.
Then comes the question about the compatibility of democracy with development. Do
democracy and democratic institutions facilitate economic development?
The empirical answer to the question is not in always affirmative. Some argue, for example, that
the experiences of Korea, Taiwan, or Indonesia show that a strong authoritarian state is better
able to engineer a successful process of economic development than an electoral democracy
such as India.
However, it is established fact that it is democracy that ensures economic development of ‘right
kind’.
What is economic development of the right kind?
Economic development of right kind has several dimensions:
• Growth in the productive capacity of society i.e. growth in productivity of labor, agriculture,
and capital. It ensures growth in per capita income and per capita assets.
• Improvement in quality of life of the poor.
• Distribution of economic assets and incomes.
• Improvement in conditions of health and safety in workplace.
• Improvement in quality of life - improved access to health care, clean water, education
• Sustainable environmental change
• Gender equity

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Indian scenario
• However, there is a school of thought that highlights the negative correlation between
democratic institutions and economic development. Some have maintained that
democratic regimes are in general less capable of managing effective economic
development than authoritarian regimes.
• The central premise of this reasoning stems from the observation that development
requires change, and that change affects some voters adversely. So governments
dependent on electoral support in the next election will typically tend to avoid choices that
impose hardship on significant numbers of voters.
• In India this is a norm. Election years’ witnesses’ series of populist measures targeted at
different voter groups and fiscal discipline is thrown out the window. This trend, in fact, has
corrosive impact on the Indian democracy.
• Numerous analysts are skeptical of India’s ability to leverage its democracy for national
development, arguing that special interests and inadequate per capita wealth make India
still unsuitable terrain for true democracy.
• Political commentator like Fareed Zakaria argues “What we need in politics today is not
more democracy but less." Allowing politics to be guided by the principles of the market
will save democracy from itself, particularly in a billion-person state. Especially in country
where, as Arun Shourie sometimes complains, "everyone has a veto."
• There is also the reverse argument as well. That India needs more democracy of the local,
civic kind in order to break free of its notorious bureaucratic culture of red-tape and
corruption.
• In a country as variegated as India, expanding individual freedoms and local empowerment
are the keys to more equitable development. Particularly at low incomes, Amartya Sen
famously argues in Development as Freedom, the intensity of economic needs requires the
constructive involvement of target populations to both define and exercise their rights.
Short of this, democracy is neither responsiveness nor a successful vehicle for delivery.
Democratic Lessons from China?
• Despite the fact that the North-South divide is quite stark in China, there is plenty to learn
from china - which in some ways acts more democratically than India.
• Though China lacks federal electoral democracy, its institutions focus on delivering services
to its people and foreign investors. By raising crop prices and upgrading transportation and
electricity networks, extreme poverty has fallen to under ten percent of the population.
• Locals have been involved in the design and implementation of massive micro-credit
schemes in rural China, and almost $1 billion is spent annually on alleviating urban poverty.
• In many respects, India faces similar challenges. Ranked only 133 out of 188 countries in the
UN Human Development Index, India’s per capita GDP still hovers under $1710. Its
population growth of 1.7% reduces the impact of economic growth to about 4%.
• Malnutrition is estimated as high as 40% and real literacy is well below the official 65%
statistic.
• Both India and China face rapid urbanization. Energy and water demand are greatest
challenges to India. Both fear the spreading AIDS epidemic, which could cost India a
generation in the words of Bill Gates. Like China, India’s bureaucracy either siphons or
absorbs much of the meager expenditures on social development.
Democratic Dilemma
• The situation in India poses a classic democratic dilemma of affluence or influence i.e.
those who can afford access to resources and benefit from privatization are less likely to be
interested in supporting public efforts to benefit society.

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• The Agriculture still accounts for 25% of GDP and involves 80% of India’s population. Thus
the real engines of widespread growth must remain in manufacturing and traditional
sectors. But excessive bureaucracy and poor infrastructure have held back opportunities to
engage the massively expanding labor force.
• The BPO economy can neither solve India’s broader governance crisis nor fund the
solutions. The sprouting of Silicon Valley style campuses will not solve the water shortage
which forces poor people to pay up to 15 times more for bottled water than the potable
drinking water to which they have no access. These are challenges that the outsourcing of
jobs to India simply cannot solve.
Where lies the solution?
• None of this implies that less democracy is the solution to India’s woes. What it instead
means is that greater accountability and transparency will allow citizens to insist on
implementation of government promises, and provide the opportunities for citizens to take
control of their economic future.
• Thus there is no contradiction between greater democracy and greater economic
liberalization and openness—the two must go hand in hand.
Need for more as well as less democracy!
• The answer to the democratic dilemma is therefore both more and less democracy. A lot
more local ownership and self-governance, with less special interest, bureaucratic and
other distortions at the top.
• A study by the management firm McKinsey & Co. concurs that greater privatization,
removal of restrictions on foreign investment and reform of land ownership laws could
virtually double India’s GNP and raise the real incomes of farming families by over 40%.
• Poor people must be empowered to literally make their own business plans, as successful
micro-credit schemes have encouraged, and fiscal management must be decentralized.
• In addition to this government must focus on stimulating spirit of entrepreneurship.

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Lessons from Asian Tigers

• The Asian Tiger success stories all involve capitalism preceding democracy, indicating an
uphill climb for India which has taken matters "in reverse."
• But the Tigers learned an important lesson from their late 1990s financial crises. The
Illiberal democracies are conducive to economic development up to a point. But overly
centralized regimes ultimately impede growth and prosperity.
• Empowering individuals to control and manage their resources, however, can propel social
and economic development to the levels people have come to expect and demand.
• The mere fact of being the world’s largest democracy with an emerging global economic
presence is not enough to claim India’s greatness. After the elections is when the real work
begins.

5. Sources
1. IGNOU module on Public Policy
2. Niti Aayog Action Agenda 2017-2020
3. Annual reports of Ministries
4. The Hindu and The Indian Express
5. Economic and Political Weekly

6. Vision IAS Test Series Questions

1. As the demand for welfare state grew, the size of the state expanded dramatically.
But now there is a demand for ‘less government, more governance'. Critically
examine.
Approach:
The answer should focus on what is meant by ‘less government, more governance’,
whether it is important in the current context and what need to be done if it is to be
achieved.
Answer:
Government cannot govern systems with a 19th century mindset, 20th century
government processes, for meeting 21st century needs. And this is the precise reason
for the urgent need of ‘minimum government, maximum governance’. The following
points examine how ‘less government, more governance’ could be achieved:
1. More governance must begin with the elected members of Parliament observing a
365-day code of conduct. This means rewriting of the oath of office as MPs. They
do not only take an oath of secrecy and allegiance to India's Constitution but also of
a solemn pledge to ensure that Lok Sabha does not become a 'Lock' Sabha and the
Rajya Sabha not a 'Rage' Sabha. This means elected representatives set the right
example of civility and decorum in parliamentary proceedings. Members may
oppose if they need to, but without obstruction and destruction; without pepper
sprays, tearing papers, pulling out mikes or indulging in unruly behaviour.
Unless the elected political class sets the right example of good governance, they
will not be able command moral authority, respect and trust to get citizens'
participation for good governance.
2. There cannot be maximum governance with minimum government without bright,
upright officers in the right places. And the critical positions begin with the cabinet
secretary, who oversees union secretaries and provides the critical link between the
PMO and the rest of the secretaries at the Centre and even the states. Other key

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positions are chief secretaries, director generals of police and revenue

commissioners. These officers need to be the best, if the goals of good governance
have to be achieved.
3. Prime Minister cannot keep transferring saved or borrowed money into leaking
buckets without plugging the holes. This is in reference to several social welfare
schemes, which are money guzzlers, doled out with an eye on the votebank.
4. Systems that enable identifying right officers for postings, transfers and promotion
for key positions, such as cabinet secretary, chief secretaries, director generals of
police and revenue commissioners, must be put in place. By Chief Secretaries
effective coordination is ensured: with capable police chiefs, law and order is made
possible, and with revenue officials, enough revenue is generated for money to be
available for equitable development.
5. Use of technology- All contracts above a certain amount can be on site to ensure a
level playing field for business and entrepreneurial community. This will restore
faith in the government.

2. Convergence and interlinking of various government schemes can lead to better

service delivery and cost effectiveness. Illustrate.
Approach:
This question requires analysis of problems of welfare schemes. Economic Survey 2013-
14 has suggested convergence of similar and overlapping schemes to improve
efficiency. You should highlight the advantages of such measure along with suitable
examples.
Answer:
Central government and state governments in India run a plethora of welfare schemes
for different purposes. However multiplicity of schemes has created following
problems:
• Overlap in the functions and target population of the schemes. Economic Survey
2013-14 cites the example of overlap in certain schemes such as the Aam Aadmi
Bima Yojana, Janashree Bima Yojana and Rashtriya Suraksha Bima Yojana, which
cater to the “same or similar category of population.”
• Lack of co-ordination between the implementing agencies
• High cost of implementation of multiple schemes puts a financial burden on the
public exchequer
• Lack of awareness among beneficiaries about the benefits, eligibility of schemes,
process and documentation and finally the grievance redressal mechanism.
Owing to such overlaps, the government constituted B. K. Chaturvedi committee for
comprehensive reviewing of the Centrally Sponsored Schemes, on whose
recommendations the government restructured merging of 147 schemes into 67
schemes.
Keeping these in mind, a host of government reports has pitched for convergence of
certain welfare schemes and programmes to ensure better delivery and streamline
expenditure. It’ll provide following benefits:
• Better co-ordination between the implementing agencies as they will be
responsible for implementation of only few targeted scheme
• Cost saving of implementation of the government machinery.

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• Better service delivery to the citizens. For example convergence of Total Sanitation
Campaign (TSC) with National Rural Livelihood Mission can promote effective
maintenance of the built up toilets. Convergence of TSC with Piped water scheme
will avoid contamination of the drinking water bodies.
• Multiplicity of schemes confuses the citizens. A few but targeted schemes will
create better awareness among them for their rights and entitlements.
• Convergence of service delivery platforms enable the people to avail the benefits
easily.
Recently government has merged service delivery platform for Rashtriya Swasthya Bima
Yojana, Aam Aadmi Bima Yojana and the Indira Gandhi old age pension scheme.
Convergence of MNREGA with other schemes relating to agriculture, forests, water
resources, land resources, rural roads, anganwadi centers, drinking water and
sanitation can increase the productivity of such assets and resources under MGNREGA,
which will help rural families to enhance the quality of their life with better livelihood
methods. 12th Five Plan has also focuses on convergence of programmes.

3. The developmental model in India should include rural development schemes that are
“demand driven” rather than “programme driven”. Examine with respect to the
design of various social sector schemes.
Approach:
Firstly, bring out the context in which the question has been framed. Then compare and
contrast between “demand driven” and “programme driven” approach. Further, try to
incorporate examples and illustrate how the current governmental schemes are
focusing on a demand driven approach. You might also use Case Study approach to
bring forward your argument (Eg. NREGA and its success story or SAGY)
Answer:
The understanding of development till late in India has been limited to implementation
of the government programs in a top down model rather than meeting the demands of
the grassroots. The program driven approaches led to the implementation of policies
built by the experts in the ivory towers to a completely different environment where
life of many got impacted. The states had long been complaining that funds for the
social sector schemes were extremely restricted as per the programs prescribed by the
centre like JNNURM, RKVY, AIBP, RGGVY etc. and could not be used for the special
requirements of the local development. Diverse regions in India had diverse needs, for
which a single handed top-down approach was not found suitable.
In the changing paradigm of development, Demand-driven governance as an approach
to development places emphasis on the following characteristics which provide
following benefits:
• A decentralised component of resource allocation and distribution which gives
priority to the people rather than any centralizing authority;
Keeping this in mind the Saansad Aadarsh Gram Yojana (SAGY) was also formulated. Its
approach focused on engaging with and mobilizing the community for participatory
local level, converging different government programs, private and voluntary initiatives
and to achieve comprehensive development in tune with people’s aspirations.

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• Substantial participation and co-determination from local actors and civil society
organisations which mobilises beneficiary contribution and gives them a sense of
ownership; e.g. Social sector schemes like Deen Dayal Upadhyaya Gram Jyoti Yojna
are being implemented not only by the CPSU’s, state government power
department, state electricity board and DISCOMs alone but cooperatives share an
equal role in its implementation
• Alignment and coordination with local authorities and governance structures also
ensures social investment.
• a set of ‘checks and balances’ to ensure local transparency and allow community
constituencies to hold state- and developmental systems accountable (‘bottom-up
accountability’) ensures optimality in performance. E.g. Social audit by Gram
Sabhas was the major reason behind the successful implementation of MGNREGA.
• The concept of demand-driven services is also linked to a paradigm shift in public
sector reform towards responsive governance
Although demand-driven programmes represent progress over top-down approaches,
but in light of available experience, certain design traps should be avoided, i.e.
• Demand-driven approaches can fragment and scatter activities. It is clear that
geographical planning and convergence among the programmes should not be
overlooked during the preparatory phase.
• There is an obvious need for both top-down and bottom-up infrastructure planning
to allow for combining heavy and light investments within the framework of local
development plans at various levels.
• Need for Capacity building at local level before such programmes.
In a nutshell, the approach of bringing local level development has made a shift
towards accommodating genuine community needs, community contributions and self-
help with regard to the various socio-cultural needs of the people. Thereby, Rural
development schemes should not only satisfy the demands of local people and
empower local self governance institutions but should have capacity building initiatives
ingrained and in tune with national objectives leading to a convergence, which would
help in achieving overall development of our nation.

4. Rights-based approach to social policy, which has rippled through India over the past
decade and a half, reorients governance from ideas of patronage towards duty of the
state and justified claims of citizens. Discuss with examples. Also, explain how the
rights-based approach helps in improving public service delivery.
Approach:
• Discuss what rights based approach to social policy is through examples.
• Explain how it has reoriented governance by putting legitimate obligations on the
state and giving people the authority to see them fulfilled.
• Conclude by highlighting its advantages in public service delivery.
Answer:
A rights based approach is empowering people to know and claim their rights. It is also
about increasing the ability and accountability of individuals and institutions that are
responsible for protecting and fulfilling those rights. A rights-based approach to social
policy implies institutions and policies that can guarantee people reasonable access to a
‘social minimum’ i.e. to fulfill basic needs like food, shelter, work, etc. As the socio-
economic condition improves, the ‘minimum’ also changes.

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In recent past, ‘Rights’ have been identified with good governance, and political and
bureaucratic efforts to improve administration are often defined in terms of expanding
rights of the citizens on the government. Further, pressure groups like Civil Society,
donor agencies (UN bodies) and others, as well as Supreme Court’s wider interpretation
of Fundamental Rights have ensured a more inclusive approach to public policy making
especially with regard to rights of the vulnerable.
With increasing knowledge, awareness, social capital and support of domestic and
international civil society, certain rights have come to be regarded as basic obligations
on the state rather than luxuries that could be delayed in the name of capability of the
state. The ‘basic minimum’ Rights are no more a state patronage, rather they are its
duties. The following measures undertaken can be considered as various aspects of
rights based approach:-
• Constitutional status to PRIs (grassroots, participative democracy)
• Adoption of Right to Information (extracting transparency and accountability), Right
to Education (to build human capital), Right to Food (through National Food
Security Act), Formulating a National Health Mission, etc.
• Adoption of Right to Public Service Acts by many States to give timely delivery of
services to people.
• Social Audit of government programmes
Importance of Rights-based approach in improving public service delivery
• Clear identification of rights, their holders and enforcers improves accountability.
• Vulnerable can be targeted and offenders can be prosecuted with better
understanding and awareness about rights.
• Helps in building capacities, capabilities and infrastructure for the realization and
enforcement of rights. It recognises the power inequality between citizens and
administration and gives the former the tools to deal with it.
• Facilitates in active and meaningful participation of multiple stakeholders. It creates
a sense of ownership of development processes.
In sum, a rights-based approach to development explicitly focuses on the attainment of
minimum conditions for living with dignity. In this way, the approach lays the
groundwork for state accountability and action as well as citizen participation and
transparency.

5. MGNREGA has been termed as a stellar example for rural development. In this
context, discuss how far the design of MGNREGA program makes it more successful
than other rural development programmes.2017-9-854
Approach:
• As Introduction briefly mention the factors that make MGNREGA a Stellar example
for rural development.
• Clearly delineate the design of MGNREGA.
• Provide successful examples of the functioning of the MGNREGA to substantiate.
Answer:
MGNREGS has served as a source of employment for the poor in distress situations
such as drought, crop failures and lean rural employment days.
• It has helped raise rural wages steadily over time, and in places where it has been
implemented well, built rural assets such as irrigation canals and roads have
augmented local infrastructure.

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Design of MGNREGA Program

The design of MGNREGA ensures:
• Rights- based, demand- driven approach: Estimation and planning of work is
conducted on the basis of the demand for work. Hence, beneficiaries of the
scheme are enabled to decide the point in time at which they want to work.
• Financial Inclusion: Since 2008, all wage payments have had to be transferred to
bank or post office accounts of beneficiaries.
• Social Security Measures: In 2008, a provision was created which made it possible
to cover beneficiaries under either the Janashree Bima Yojana (JBY) or the
Rashtriya Swasthya Bima Yojana (RSBY).
• Use of information technology: in terms of identification, implementation and
distribution of wage payments has been made through e-FMS (Electronic Fund
Management System ) and
• Gender Equity: Men and women are entitled to equal payment of wages. One-
third of the beneficiaries are supposed to be women. Worksite facilities like
creches are to be provided at all worksites.
• Transparency and Accountability – All MGNREGA- related accounts and records
documents have to be available for public scrutiny. Contractors and use of
machinery is prohibited.
• Decentralized Planning
o Gram Sabhas to recommend works
o At least 50% of works by Gram Panchayats for execution
o Principal role of PRIs in planning, monitoring and implementation
Success of MGNREGA
• While there are mixed outcomes in terms of implementation across the states, due
to use of banking/postal network, this program is still considered to be one of the
most successful program compared to other social development programs in the
country.
• Some statistics suggest that the scheme have raised the number of rural account
holders to an enormous 8.6 crore. This aspect of financial inclusion initiated by such
bank accounts has increased savings as well as access to better credit to the rural
poor.
• The program also helped in improving equity across the communities. Out of those
employed, an astounding 81 per cent reside in kachha houses, around 61 per cent
are illiterate and about 72 per cent have no access to electricity in their households.
• The MGNREGA also appears to have helped women enormously. Latest information
suggests that over 53 per cent of the total employment provided in the past eight
years has been undertaken by women. This could have improved the social and
economic status of women to some extent in the rural areas.
• The recent initiatives such as Aadhar based transfers as well as improving the
banking network (through both formal banking as well as by making India Post as
core banking compliant) will only further improve the efficiency of the program and
improve livelihood among the poor in the rural areas.
The Program has been termed as ‘the stellar example for rural development’ by the
World Bank. It is termed as automatic stabilizer of the economy and acts as a counter
cyclical measure.
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VISION IAS

VALUE ADDITION MATERIAL – 2018

PAPER II: GOVERNANCE

DEVELOPMENT PROCESSES AND THE DEVELOPMENT

INDUSTRY - THE ROLE OF NGOS, SHGS, VARIOUS GROUPS AND
ASSOCIATIONS, DONORS, CHARITIES, INSTITUTIONAL AND
OTHER STAKEHOLDERS

Copyright © by Vision IAS

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in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior
permission of Vision IAS

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DEVELOPMENT PROCESSES AND THE DEVELOPMENT

INDUSTRY - THE ROLE OF NGOS, SHGS, VARIOUS GROUPS
AND ASSOCIATIONS, DONORS, CHARITIES,
INSTITUTIONAL AND OTHER STAKEHOLDERS
Table of Contents
1. Development Processes .........................................................................................................3

1.1. What is Development and Development Process? ...........................................................3

2. Civil Societies .........................................................................................................................5

2.1. What are Civil Societies?..................................................................................................5

2.2. Civil Society in India .........................................................................................................5

2.3. Types of Civil societies in India .........................................................................................6

2.4. National Policy on Voluntary Sector .................................................................................6

3. Non-Governmental Organizations (NGOs) ..............................................................................8

3.1. What are Non-governmental Organizations (NGOs)? .......................................................8

3.2. Types of NGOs .................................................................................................................8

3.3. Role of NGOs in Development .........................................................................................9

3.4. Role of NGOs in Protection of Environment ...................................................................10

3.5. Challenges faced by NGOs in India .................................................................................11

3.6. State v/s NGOs ..............................................................................................................11

3.7. Suggestions to Improve the Working of NGOs................................................................12

4. Self Help Groups (SHGs) .......................................................................................................13

4.1. What are SHGs?.............................................................................................................13

4.2. How Does SHGs Function? .............................................................................................13

4.3. Evolution of SHGs in India ..............................................................................................14

4.4. Benefits of SHGs ............................................................................................................15

4.5. General Issues related to SHGs ......................................................................................15

4.6. Socio-Cultural Hurdles in Penetration of SHGs in Rural Areas .........................................16

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4.7. Measures Taken by the Government to Promote the SHGs ............................................16

4.8. Suggestions to Improve the Working of SHGs ................................................................17

5. Aid and Private Funding in Development ..............................................................................18

5.1. Development Aid in India ..............................................................................................18

5.2. Foreign Aid to India .......................................................................................................18

5.3. Foreign Funding and NGOs ............................................................................................19

5.4. Foreign Aid from India ...................................................................................................20

6. Microfinance Institutions .....................................................................................................21

6.1. What are Microfinance Institutions? ..............................................................................21

6.2. Role of Microfinance Institutions in Development .........................................................21

6.3. Issues Related to Microfinance Institutions ....................................................................22

6.4. Suggestions to Improve the Working of Microfinance Institutions ..................................22

7. Societies, Trusts, Donors, Charities and other Stakeholders ..................................................23

7.1. Societies ........................................................................................................................23

7.2. Trusts, Religious Endowments and Waqfs ......................................................................24

7.2.1. Trusts......................................................................................................................24

7.2.2. Religious Endowments ............................................................................................24

7.2.3. Waqfs in India .........................................................................................................25

7.3. Trade Unions .................................................................................................................26

8. Previous Year Vision IAS GS Mains Test Series Questions ......................................................27

9. Previous Year UPSC GS Mains Questions...............................................................................37

Copyright © by Vision IAS

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system or transmitted in any form or by any means, electronic, mechanical, photocopying,
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1. Development Processes
1.1. What is Development and Development Process?
A multitude of meanings have been attached to the term development. It is mostly confounded
with economic growth. Also, larger meanings such as social development, sustainable
development and human development are attributed to it.
In simple terms, Development is ‘bringing about social change that allows people to achieve
their human potential’.
Amartya Sen has given the concept of development a
Dimensions of Development new dimension. He views development as a political
• Development as a political process: process. According to Sen, Development consists of
the removal of various types of unfreedoms that
It is regarded as the something that
leave people with little choice and little opportunity
is done by some agency (state or
of exercising their reasoned agency.
development organization) for
others. It is called political process as it raises questions about who has the power to do
what to whom.
• Human Development: Sen has been flag bearer of this approach. He considers economic
growth as measure of development a deeply flawed and inadequate approach. He
redefined development in terms that include human rights as a constitutive part and all
worthwhile processes of social change are simultaneously rights-based and economically
grounded. His capability approach focuses on the well being of those at bottom of the
society, not on the efficiency of those at the top.
• Sustainable Development: “Our Common Future”, also called Brundtland Report defines
Sustainable development as development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. To achieve it, UN
has established Sustainable Development Goals (SDGs) – a wide ranging targets – to be
achieved by 2030. The goals and targets are universal, meaning they apply to all countries
around the world, not just poor countries. Reaching the goals requires action on all fronts –
governments, businesses, civil society and people everywhere all have a role to play.

• Economic Development: Economic development is the process by which a nation improves

the economic, political, and social well-being of its people. It is different from economic
growth in a sense that it involves both quantitative and qualitative change. Also it is process
by which low income national economies transform into modern industrial economies.

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• Social Development: Social development

means investing in people. It requires the
removal of barriers so that all citizens can
journey toward their dreams with confidence
and dignity. It is about refusing to accept that
people who live in poverty will always be poor.
It is about helping people so they can move
forward on their path to self-sufficiency. In
India context, it becomes very important as
social barriers like caste system proves to be
fetters to realize one’s potential and enjoy
social freedom. Removal of such barrier
through state action is important part of social
development.

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2. Civil Societies
2.1. What are Civil Societies?
According to the World Bank, Civil Society refers to refers to a wide array of organizations,
community groups, non-governmental organizations [NGOs], labour unions, indigenous groups,
charitable organizations, faith-based organizations, professional associations and foundations.
• Globally, the term ‘Civil Society’ became popular in 1980s, when it started to be identified
with non-state movements defying authoritarian regime, especially in Eastern Europe and
Latin America.
• When mobilized, civil society - sometimes called the “third sector” (after government and
commerce) - has the power to influence the actions of elected policy-makers and
businesses.
• Examples of well-known civil society organizations include Amnesty International, the
International Trade Union Confederation, World Wide Fund for Nature (WWF), Greenpeace
and the Danish Refugee Council (DRC).
Following representation illustrate various factors that are important for survival and
sustainability of civil society.

2.2. Civil Society in India

• Civil society derives its strength from the Gandhian tradition of volunteerism, but today, it
expresses itself in many different forms of activism. In independent India, the initial role
played by the voluntary organizations started by Gandhi and his disciples was to fill in the
gaps left by the government in the development process.
• The volunteers organized handloom weavers in villages to form cooperatives through which
they could market their product directly and get better price. AMUL is the product of such
cooperative movement.
• Civil Society plays a crucial role in the good governance. As India is not a participative
democracy but a representative democracy, government takes all major decisions by itself.
Civil Society act as interface of interaction between the government and the governed.
• Civil society’s functional contribution to good governance could be:

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o Watchdog — against violation of human rights and governing deficiencies.

o Advocate — of the weaker sections’ point of view.
o Agitator — on behalf of aggrieved citizens.
o Educator — of citizens on their rights, entitlements and responsibilities and the
government about the pulse of the people.
o Service provider — to areas and people not reached by official efforts or as
government’s agent.
o Mobiliser — of public opinion for or against a programme or policy.
• Civil society acts through ‘social capital’— the capacity of people to act together willingly in
their common long-term interest. Social capital is strong in a homogeneous, egalitarian
society.
2.3. Types of Civil societies in India
Based on the law under which the CSOs operate and the kind of activities they take up, civil
society groups in our country can be classified into following broad categories (as given in 2nd
ARC):
• Registered Societies formed for specific purposes
• Charitable organisations and Trusts
• Local Stakeholders Groups, Microcredit and Thrift Enterprises, SHGs
• Professional Self-Regulatory Bodies
• Cooperatives
• Bodies without having any formal organisational structure
• Government promoted Third Sector organisations
However, a broader classification including all non-government and not-for-profit organizations
can be:
• Civil rights advocacy organizations: to promote human rights of specific social groups e.g.
women, migrants, disabled, HIV, sex workers, Dalit people, tribal people, and the likes.
• Civil liberties advocacy organizations: to promote individual civil liberties and human
rights of all citizens, rather than focusing on particular social group.
• Community based organizations, citizen’s groups, farmers’ cooperatives: to increase
citizen’s participation on public policy issues so as to improve the quality of life in a
particular community.
• Business and industry chambers of commerce: to promotion policies and practices on
business.
• Labour unions: to promote the rights of employees and workers.
• International peace and human rights organizations: to promote peace and human rights.
• Media, communication organization: to produce, disseminate, or provide production
facilities in one or more media forms; it includes television, printing and radio.
• National resources conservation and protection organizations: to promote conservation of
natural resources, including land, water, energy, wildlife and plant resources, for public use.
• Private and public foundations: to promote development through grant- making and
partnership.
• Also the Civil society includes: Political Parties; Religious Organizations; Housing
cooperatives, slum dwellers and resident welfare associations.
2.4. National Policy on Voluntary Sector
National Policy on Voluntary Sector 2007 is a commitment to encourage, enable and empower
an independent, creative and effective voluntary sector, so that it can contribute to the social,
cultural and economic advancement of the people of India.

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Aims of the Policy

• Creating an enabling environment for Voluntary Organizations (VOs) that not only
stimulates their effectiveness but also protects their identity and safeguards their
autonomy.
• Enabling VOs to legitimately mobilize the necessary financial resources from India and
abroad
• Identifying systems by which the Government may work together with the Voluntary Sector.
• Encouraging VOs to adopt transparent and accountable systems of governance and
management.
This National Policy on the Voluntary Sector-2007 envisaged to initiate a process to evolve a
new working relationship between the Government and the Voluntary Sector, without affecting
the autonomy and identity of VOs.
Analysis
• Most of the policies envisaged in the NPVS 2007 were not implemented. Though the
directions were framed after extensive consultations with multiple stakeholders.
• The idea of a national accreditation agency for non-profits organization was proposed. But
nothing has been done in this regard.
• The policy made a call for self-regulation, transparency and accountability by the NGOs. But
the recent SC judgments and IB reports suggest otherwise.
• Also the diverse character of a voluntary organization militates against a single uniform
regulatory authority.

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3. Non-Governmental Organizations (NGOs)

3.1. What are Non-governmental Organizations (NGOs)?
Civil Society, when organized in structure and specialized in function, takes the form of NGOs
(Non Governmental Organizations).
Characteristics of NGOs
• It is an organization of private individuals who believe in certain basic social principles.
• They structure their activities to bring about development to communities they are
servicing.
• It is a social development organization.
• An independent, democratic, non-sectarian people’s organization working for the
empowerment of economic and/or socially marginalized groups.
• An organization not affiliated to political parties.

3.2. Types of NGOs

In the 1980s, three different forms of NGO/voluntary movement emerged in India.
• Traditional Development NGOs: These NGOs directly engage with the public at large, go to
the villages, tribal areas and carry out grass root development work related to education,
health, sanitation, rural development etc. Ex: treatment centre for leprosy patients run by
Baba Amte in central India.
• Activist NGOs: They see activism as their primary means of reaching their goals, because
they do not believe they could get the authorities to move in any other way. Perhaps the
best-known example of an NGO in this category is the Narmada Bachao Andolan (Save
Narmada Campaign), an organization that opposed the construction of a series of large
dams in a large river valley of central India.

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• Research NGOs: They carry out intensive and in-depth analysis of topic/issue and lobby
with the government, industry or other agencies to influence public policy. Ex: Centre for
Science and Environment which engages in environment related works.
However, this classification is not strict and rigid. These NGOs keep taking multiple works that
can be categorized in one category or other.
NGOs can also be classified on the basis of:
• Whom the NGO is designed to benefit? i.e. the beneficiary.
• What the NGO does? i.e. the activity.
Following is schematic representation of how a single NGO can have multiple activities and
beneficiaries.

3.3. Role of NGOs in Development

In developing countries India, there are numerous gaps left by the government in the
development process. These gaps are filled by NGOs.
• Work where state is unwilling to work: For example, caste is an issue that no government
wants to fiddle with. The persistence of caste hierarchy suits the vote banks for the
politicians. In the process, laws prohibiting discrimination on the basis of caste are often
ignored unless there is an NGO working in the area that is willing to take up the cause of
those being discriminated against.
• Work where state resources are inadequate: Two main such area include education and
healthcare. There are not enough government run schools or hospitals, especially in rural
areas. Even if they are present, they do not have resources. The NGOs try to complement
and complete these initiatives. The mammoth NGO called Kerala Sastra Sahitya Parishad is
largely credited for the hundred percent literacy rate in that state.
• Fighting social evils: It is due to the efforts of NGOs that the government has banned sex
determination of foetus as it leads to evils like abortion of female fetus.
• Right to Shelter: NGOs such as YUVA and SPARC in cities like Mumbai have repeatedly
opposed the demolition of hutments even as they try to improve the quality of life in the
sprawling slum clusters
• Right to Information: It is because of the efforts of NGOs that RTI has become reality in
India.
• Tribal Rights: As witnessed in the Vedanta vs. Posco case, NGOs have raised voice against
the discrimination of tribal by the multinationals. Many of these NGOs have partnered with
Gram Panchayat in proper implementation of acts like Forest Rights Act, CAMPA Act etc.
• Community Development: Local, national and regional NGOs have emerged as major

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players and partners in development activities in the region. At the community level, they
are in the front line in providing assistance in the acquisition of basic needs and amenities;
in identifying issues, raising awareness, and in articulating the communities’ problems.
• Rehabilitation: NGOs did remarkable job post 2004 Tsunami. Besides helping in rescue
operations, NGOs also set up vocational training centers.
• Implementation of welfare schemes: NGOs due to proximity to general public, work as
interface between government and the end users. Thus NGOs play three roles of
implementer, a catalyst and a partner in the implementation of government welfare
schemes.
3.4. Role of NGOs in Protection of Environment
The rapid growing and economic development is leading to number of environmental issues in
India. In order to deal with the increasing damage to environment many Non-Governmental
organizations have been set up.
• They play a crucial role in helping to plug gaps by conducting research to facilitate policy
development, building institutional capacity, and facilitating independent dialogue with civil
society to help people live more sustainable lifestyles.
• The issues like future of environmental protection, sustainable development and zero
population growth are some of the major concerns of the environmental NGOs.
• Major campaigns by NGOs:
o Climate Change
o Protection of Pristine forests
o Protection of marine life and diversity
o Against whaling
o Against Genetic Engineering/ GMOs
o Prevention of Nuclear Threat to wildlife
o Elimination of chemical and biological toxic waste
o Encouragement of sustainable trade
• NGOs carry out mass awareness campaigns, tree planting drives, promoting ecologically
sustainable practices for waste removal like vermin-culture and composting instead of
dumping in landfills, supporting the use of cycles and green renewable fuels instead of
fossil fuels.
• Many NGOs specialize in data-driven support to government bodies, showing quantifiable
proof that encroachment upon biodiversity and water bodies is dangerous. Their reports
become the basis of media attention, educating the masses and eventually molding
opinion.
• Globally, NGOs have the power to bring about global treaties, including reforms to address
regulation of hazardous wastes, bans on landmines, and control of greenhouse gases and
emissions. The Centre for Science and Environment for example, has been a leading light
on, pollution, toxins in food and beverage and other key areas.
• Some major environmental NGOs in India are:
o Greenpeace
o WWF
o Bombay Natural History Society (BNHS)
o Development Alternatives Group
o The Energy Research Institute
o Birdlife International
o The Centre for Science and Environment
• Bombay Natural History Society: It conducts field research projects on bird migration. It
also studies certain endangered species of wildlife and their habitat and through

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environmental education imparts the knowledge and awareness of the need to conserve
wildlife.
• The Energy Research Institute: Its mission is to develop and promote technologies, policies,
and institutions for efficient and sustainable use of natural resources. It deals with policy-
related works in the energy sector, research on environmental subjects, development of
renewable energy technologies and promotion of energy efficiency in the industry and
transport sector.
3.5. Challenges faced by NGOs in India
• Lacks of funds – Most of the NGOs in India are suffering from paucity of funds. Government
does not give cent percent grants in aid or make delay in sanctions of grants for numerous
programmes. NGOs have to make matching contributions which they are sometimes unable
to manage and are, therefore, unable to avail themselves of the grants
• Inadequate Trained Personnel – It is expected that the personnel working in NGOs shall
have a sense of dedication and commitment and interest in the social services. Lack of
professionally trained personnel is one of the major challenges faced by NGOs in India.
• Misuse of Funds – It is a common experience that there have been serious charges of
misuse and misappropriation of funds received as grant-in-aid form the government,
foreign donors and raised through their own resources by the most of the NGOs. These
NGOs may reflect its image to other NGOs who are working with dedication and
commitment.
• Inequality in rural areas – NGOs are more developed in urban areas as compared to rural
areas. The backwardness and ignorance of the rural people and lack of enthusiasm among
social workers to among them in the absence of availability of minimum comforts are the
two important reasons for the backwardness of the NGOs in rural areas.
• Lack of Volunteerism/Social work among Youth – The basic characteristic of NGO is
volunteerism. The extent of volunteerism is declining day by day and turning it into
professionalization. Even the young graduates from social work are interested in making
their career in professionalism. This leads to lack of efficient volunteers in NGOs.
3.6. State v/s NGOs
India has witnessed boom in NGO sector. According to a conservative estimate by the CBI, there
is 1 NGO for every 600 citizens in India. But there is accountability deficit with NGOs in India.
Responding to a PIL filed in Supreme Court, CBI said that many don’t submit details of receipt of
grant and spending to tax officials.
In a Supreme Court enquiry, major states like Andhra Pradesh, Bihar, Delhi, Haryana, Karnataka,
Rajasthan, West Bengal, Odisha, Tamil Nadu, Chhattisgarh and Himachal Pradesh could not
provide details regarding NGOS working in their territory. This largely explains the regulatory
mechanism of the NGOs in India. Supreme Court in 2017 ordered government to audit 30 lakh
NGOs and voluntary organizations that receive public funds but fail to explain their spending.
A PIL has shown that NGOs do not have a transparent mechanism in place to monitor funding.
A Central Bureau of Investigation (CBI) report that compiled state-wise data of 32 lakh NGOs
revealed that only 10 percent of NGOs filed annual income and expenditure statements.
Intelligence Bureau, in a report accused "foreign-funded" NGOs of "serving as tools for foreign
policy interests of western governments" by sponsoring agitations against nuclear and coal-
fired power plants and anti-GMO agitation across the country. The NGOs, are said to be working
through a network of local organizations to negatively impact GDP growth by 2–3%.
It also alleged that Greenpeace was leading a massive effort to take down India's coal-fired
power plant and coal mining activity by using foreign funds to "create protest movements

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under 'Coal Network' umbrella at prominent coal block and coal-fired power plant locations in
India.
In April 2015, the Government of India shared a list of over 42,000 NGOs with Financial
Intelligence Unit (FIU) to check suspicious foreign funding amid the crackdown on some top
international donors for flouting the Foreign Contribution Regulation Act (FCRA), 2011.
For the first time, the government clearly defined the sectors in which it has listed Christian
missionaries, Hindu, Sikh and Muslim religious groups receiving foreign contribution besides
other activities of NGOs in which funds are claimed to be utilized. There is also suspicion that
money launderers could use the legitimate route to wire illicit money.
3.7. Suggestions to Improve the Working of NGOs
• The rules and regulations of grants-in-aid should be liberalized by the government and
sanction more grants to NGOs.
• At the same time, the government should appoint commissions of enquiry or committees
to cross check the misuse of funds by NGOs. The member of committee has to supervise
and monitor the activities of NGOs periodically.
• Young graduates from universities, colleges and schools should conduct the public
seminars, meetings etc., and use the local media to advertise the importance of
volunteerism, success stories of NGOs and encourage people to participate in voluntarism.
• Universities, colleges and schools should collaborate with NGOs and conduct a campus
interviews for the young graduates who are interested in voluntarism. NSS and NCC should
encourage students to participate in voluntarism from childhood days onwards.
• In India, 65% of populations belong to rural areas. NGOs, therefore, need to operate in rural
areas on a bigger scale to enlist the cooperation of village people in making their lives
better. At the same time, these NGOs should encourage the educated young graduates of
rural areas to participate in voluntarism. The government should also give some special
provisions for NGOs who are working in rural areas in getting eligibility conditions for
grants.
• NGOs being a welfare organization should maintain high standard of quality in service. The
government also should recognize those NGOs, by giving awards or rewards with additional
grants. This would motivate the other NGOs to work efficiently
• The government should revise the pay-scales and allowances to the personnel of NGOs. At
the same time some special funds to be allotted for the NGOs to train the personnel at the
grass root level.
• The NGOs should use of latest technologies like internet, websites etc., for raising of their
funds, to have mutual associations, to advertise their products and for the selection of
efficient personals.

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4. Self Help Groups (SHGs)

4.1. What are SHGs?
Self-help group is a method of organizing the poor people and the marginalized to come
together to solve their individual problem. The SHG method is used by the government, NGOs
and others worldwide. The poor collect their savings and save it in banks. In return they receive
easy access to loans with a small rate of interest to start their micro unit enterprise.
A Self Help Group is defined as a "self-governed, peer controlled information group of people
with similar socio-economic background and having a desire to collectively perform common
purpose."
4.2. How Does SHGs Function?
• An SHG normally consists of not less than five persons (with a maximum of twenty) of
similar economic outlook and social status.
• The members of the group help each other to solve their problems. A reasonably educated
but helpful local person takes the lead in mobilizing these people to form a group.
• The person, called animator or
facilitator, helps the group members
develop the habit of thrift and
promote small savings among them.
The group savings are kept in a
common bank account from which
small loans are given to members.
• After six months, the SHG can
approach any bank for availing loan
facility to undertake a suitable
entrepreneurial activity. The group
loan is distributed among the members
to run a small business. The loan is repaid out of the profits earned.

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4.3. Evolution of SHGs in India

• Evolution of SHGs as a tool to empower is as long as the history of development sector in
India. SHG as an organized way for poverty eradication was immerged during the 7 th Five
Year Plan (1985-90).
• Formation of SHGs for savings and credit, and their linkage to commercial banks was
initiated in India by MYRADA (Mysore Resettlement and Development Agency), an NGO, in
the mid-1980s.
• However, SHGs as a tool to address poverty became significant only when the Reserve Bank
of India (RBI) issued a circular in 1992 to link about 500 groups under the NABARD-SHG
bank linkage pilot program.
• This success has led to mainstreaming of SHGs into the financial landscape and especially
the Indian banking system, with about 94 million poor linked with banks through 7.5 Million
SHGs, availing them of collateral free credit.
• The poor women of these SHGs in India collectively control the financial business with an
annual turnover of Rs 100,000 crores ($17 Billion), much larger than many multi-national
corporations in India.
• Simultaneously, a handful of large Indian NGOs have demonstrated that collectivization can
lead to social and economic empowerment of the poor in the areas of health, bridging
caste divides and gender inequalities.
• As a part of the poverty alleviation measures, the Government of India launched the
Swarnjayanti Gram Swarozgar Yojna (SGSY) in April, 1999 where the major emphasis is on
SHG formation, social mobilization and economic activation through micro-credit finance
• This success led to the genesis of a massive community mobilization initiative by the
Government of India as National Rural Livelihoods Mission (NRLM) in 2011.

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4.4. Benefits of SHGs

• According to some estimates, about 46 million rural poor women are mobilized through
SHGs architecture. These organizations have been an effective vehicle, especially in
providing financial
intermediation solutions
for unbanked rural women.
• The socio-economic
benefits include economic
self independence,
participation in village
affairs and awareness
about education.
• Under National Rural
Livelihood Mission, special
attention has been given to women living below poverty line (BPL). The scheme has also
focused on capacity building and institutionalization of SHGs. It has also helped in social
mobilization, institution building, communization and creation of human resource.
• Regular process of group meetings helps women build social capital. It raises their status in
the family and the society.
• Economic empowerment helps them take decision making role in the family. Thus help
them break shackles of patriarchy.
• A research has also shown that Women practicing ‘participatory learning and action’
showed 49 % reduction in maternal mortality and 33 % reduction in neonatal mortality.
4.5. General Issues related to SHGs
• Agricultural Activities: Most of the SHGs work at local level and engaged in agricultural
activities. SHGs in rural areas should be introduced to non-agricultural businesses too and
should be provided with state-of-the art machinery.
• Lack of Technology: Most of the SHGs work with rudimentary or no technology.
• Access of market: Also the goods produced by SHGs do not have access to larger market
place.
• Poor Infrastructure: Most of these SHGs are situated in rural and far reach areas that lack
connectivity via road or railways. Access to electricity remains an issue.
• Lack of training and capacity building: Most of the SHGs work on their own without
outreach from the state for skill development and capacity building.
• Politicization: Political affiliation and interference has become a serious problem with
SHGs. Political affiliation is also a major reason for group conflicts.
• Credit Mobilization: A study has shown that about 48% of the members had to borrow
from local money lenders, relatives and neighbors because they were getting inadequate
loan from groups. Also issues like hoarding of money was witnessed.
• System of monitoring: The general reports on the progress of SHGs show statistics of
growth and spread of SHGs without questioning the process and internal health of the
SHGs.
• Livelihood promotion: There is need to evolve a methodology for promoting micro
enterprises among SHG members that can be replicated on a large scale.

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4.6. Socio-Cultural Hurdles in Penetration of SHGs in Rural Areas

There has been uneven distribution in the spread of SHGs in India. Socio-cultural factors along
with government support and presence of NGOs have been major reasons for that. In March
2001, 71% of the linked SHG, were from southern region consisting of Andhra Pradesh,
Karnataka, Kerala and Tamil Naidu.
• While poor performing states are also those states which have high incidence of poverty
like UP and Bihar.
• These are also the states where society is deeply entrenched in patriarchy with limited
financial and social role for women.
• Also the spirit of entrepreneurship is discouraged in a feudal society. The traditional society
dictate strict role for male and female members with little scope for independent decision
making and economic freedom.
• Due to family responsibilities, majority of the women members cannot give their attention
to their enterprises.
• One of the major hurdles in lack of support from family members.
• Due to male dominated society, women members could not uplift their business followed
by lack of social mobility.
• There is no stability of the units as many married women are not in a position to associate
with the group due to the shift of their place of residence.
• In many SHGs strong members try to earn a major share of the profit of the group, by
exploiting the ignorance and illiterate members.
4.7. Measures Taken by the Government to Promote the SHGs
• Self Help Group-Bank Linkage Programme: On the recommendations of SK Kalia
Committee, the SHG-Bank linkage programme was started at the initiative of NABARD in
1992 to link the unorganised sector with the formal banking sector. Under this programme,
banks were allowed to open savings accounts for Self-Help Groups (SHGs). Banks provide
loans to the SHGs against group guarantee and the quantum of loan could be several times
the deposits placed by such SHGs with the banks. Banks should consider entire credit
requirements of SHG members, namely,
(a) income generation activities,
(b) social needs like housing, education, marriage, etc. and
(c) debt swapping”.
It is being implemented by commercial banks, regional rural banks (RRBs), and cooperative
banks.
• The RBI took a series of measures in April 1996 to give a thrust to micro finance based
Lending under the SHG-bank Linkage programme. Over 103 million rural households have
now access to regular saving through 7.96 million SHGs linked to benefit.
• Priority Sector Lending: GOI has included SHG as a priority sector to mandate and enhance
banks focus on them. Bank credit to members of SHGs is eligible for priority sector advance
under respective categories viz., Agriculture, Micro, Small and Medium Enterprises, Social
Infrastructure and Others.
• SHG, have been allowed to run grain banks to secure the food security in food & care
regions.
• Priyadarshini scheme, with NABARD as the nodal agency, has aimed at women
empowerment and livelihood enhancement through SHGs.
• Deendayal Antodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM): It seeks to
alleviate rural poverty through building sustainable community institutions of the poor.
Mission closely works with the Department of Financial Services (DFS), Reserve Bank of

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India (RBI) and the Indian Bank Associations (IBA) to provide bank credit to SHGs. The
financial year 2017-18 has seen more than 82 lakh households mobilized into 6.96 lakh Self
Help Group (SHGs) across the country. Cumulatively, more than 4.75 crore women have
been mobilized into more than 40 lakh SHGs. The mission also provides Interest Subvention
to women SHGs availing bank loans amounting to Rs.3.00 lakhs, to subsidize the cost of
borrowing. The interest subvention effectively reduces the cost of borrowing to 7% per
annum.
• Mahila Kisan Shashaktikaran Pariyojana: In order to promote agro-ecological practices that
increase women farmers’ income and reduce their input costs and risks, the DAY-NRLM
Mission has been implementing the Mahila Kisan Shashaktikaran Pariyojana (MKSP). As of
March 2018, more than 33 lakh women farmers were being supported under this scheme.
4.8. Suggestions to Improve the Working of SHGs
• The An integrated approach is required for meeting overall credit needs of a poor family in
terms of backward linkages with technology and forward linkages with processing and
marketing organizations.
• Credit needs to be provided for diversified activities including income generating livelihood
activities productions, housing consumption loan and against sudden calamities.
• The delivery system has to be proactive and should respond to the financial needs of the
farmers.
• Training programmes relating to management of finances, maintaining accounts,
production and marketing activities etc. should be given.
• Simplify the process of giving loans, i.e. reduce the number of questions to important non
repetitive ones.
• Provide gender sensitization training to bank staff so that they are sensitized to the needs
of rural clients especially women.
• Adequate insurance coverage should be provided to the business units promoted by SHG
against the financial losses to safeguard the interest of the entrepreneurs.

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5. Aid and Private Funding in Development

5.1. Development Aid in India
Development aid is financial aid given by
governments and other agencies to support the
economic, environmental, social and political
development in developing countries. It involves
long term strategy to alleviate poverty.
• Foreign experts call India a ‘development
paradox’. India is one of the largest economies
with high growth rate. It spends substantial
amount on the defense expenditure. Yet, it
seeks development aid. It has created quite a
debate at international level.
• Corruption: Foreign grants (often in dictatorial
states in Africa) are siphoned by government
officials for private. It has also bred numerous non-performing NGOs.
• Identification of Projects: A very great deal of money has been wasted in the past because
proposals have not been sufficiently investigated before aid was granted, and because
priorities have not been correctly established.
• Influence recipient countries: Aid donors are often accused of trying to exercise
unnecessary influence over recipient governments and the policies they undertake.
• Debt Serving: In the global economic slowdown, many countries have not been able to
service their debt.
5.2. Foreign Aid to India
• The term “foreign aid” is derived from the concept of “Overseas Development Assistance”
or ODA. In UN parlance ODA is a commitment assumed by developed countries, members
of the OECD, to extend development assistance to developing countries. Currently,
developed countries are committed to transferring 0.7% of their GDP as ODA to developing
countries, though few have achieved this target.
• The India was the sixth largest recipient of foreign aid
in 2011 and continues to be one of the highest
recipients. According to the data on World Bank’s
website, it received $3.2 billion in 2011, $1.6 billion in
2012 and $2.4 billion in 2013.
• The top donors have been- World Bank, Japan,
Germany, Asian Development Bank, United Kingdom,
France, Global Fund (to fight AIDS, tuberculosis and
malaria), United States and European Union.
• India has also been giving aid to other countries. It has
a foreign aid budget of $1.6 billion for the period 2015-16.
• However in recent times foreign aid coming to India has declined significantly. It partly due
to India’s rapid economic progress and partly due to ever-changing geo-political axis.
• U.S. aid to India, targeted toward clean energy, food security and health, has dropped 25
percent in recent years, from nearly $127 million in 2010 to a proposed $98.3 million in
2013.
• In 2015, UK stopped giving aid to India owing to it’s economic growth. Indian government
welcomed the move by suggesting that ‘aid is past, trade is future’.

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• India now sees – and projects – itself as a global power and a partner to developed nations
like Britain, rejecting the traditional model of rich nations aiding poor ones.
5.3. Foreign Funding and NGOs
Being non-profit organizations, NGOs entirely depend upon contribution – foreign or domestic
– for their functioning. In recent times, many NGOs have come under the government scanner.
The Foreign Contribution (Regulation) Act, 2010 (FCRA) and Foreign Contribution (Regulation)
Rules, 2011 (FCRR) framed thereunder regulate the receipt and usage of foreign contribution by
non-governmental organizations (NGOs) in India.
Foreign Contribution Regulation Act, 2010
This act replaced the Foreign Contribution (Regulation) Act, 1976 (FCRA). The act seeks to
regulate the acceptance and utilization of all foreign funds through donations, gifts or grants.
• The 1976 Act lists a number of organisations and individuals that are prohibited from
accepting foreign contribution. The Bill adds organisations of a “political nature” and
electronic media organisations to the list.
• The act requires all persons to register under FCRA to accept foreign contribution. The
central government may deny, suspend or cancel certification under certain conditions.
• Organisations must renew FCRA certification every five years.
• It prohibits acceptance and use of foreign contribution or foreign hospitality by a certain
specified category of persons such as a candidate for election, judge, journalist, columnist,
newspaper publication, cartoonist, et al.
• The act prevents use of foreign contribution or foreign hospitality for any activity
detrimental to the national interest.
• The foreign contribution shall be utilized for the purpose for which it has been received and
such contribution can be used for administrative expenses up to 50% of such contribution
received in a financial year.
• Every bank shall report to such authority, as may be prescribed, the amount of foreign
remittance received, sources and manner and other particulars.
• Every NGO registered or having prior approval under the Act must file an annual report with
the Authority in the prescribed form. This report must be accompanied by an income and
expenditure statement, receipt and payment account, and balance sheet for the relevant
financial year. For financial years where no foreign contribution is received, a 'NIL' report
must be furnished with the Authority.
• New provisions have been made for suspension as well as cancellation of registration
granted for violation of the provisions of the Act.
The act has a very wide scope and is applicable to a natural person, body corporate, all other
types of Indian entities (whether incorporated or not) as well as NRIs and overseas branches/
subsidiaries of Indian companies and other entities formed or registered in India. It is
implemented by the Ministry of Home Affairs, Government of India.
Recent issues with the FCRA act and impact on the NGOs
• On July 24, 2018, the Union Minister of State for Home Affairs in a reply to Lok Sabha said
that, FCRA registration of nearly 19,000 NGOs have been cancelled from 2011 till now and
they have been barred from receiving foreign funds. He also told the House that as on date,
2,547 NGOs have not adhered to the government orders to submit their pending annual
returns -- income and expenditure, receipts of funds from abroad and balance sheets.
• Of all the total funds that are coming, 13% is for contentious issues like religious institutions
and awareness campaign. Government is terming both as anti-national activity as religious

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institutions are fueling terrorist activities and awareness campaign are targeting
developmental projects of Government
• Experts have signaled towards a paradox where India promotes FDI but throttles
contribution to NGOs. In the past, similar bans were put by communist countries like Russia
and Hungary.
• An IB report blamed NGOs for slump in India’s GDP. It is also accused that some Christian
NGOs are engaged in proselytization. US based NGO Compassion International was put on
‘priority list’ by the government.
• In June 2018, the government relaxed penalties on NGOs violating FCRA norms. From now
on, instead of suspension or cancellation of licenses, hefty fines will be levied on NGOs.
These fines will not be applicable retrospectively.

Recent Amendments in FCRA to exempt political parties

• Finance Bill 2016, inserted an amendment that shielded political parties from violating the norms of
FCRA. The amendment was brought after a case was filed in Delhi High Court regarding donations
made to BJP and INC by London based multinational Vedanta.
• In March 2018, the parliament through Finance Bill 2018 amended the repealed Foreign
Contribution Regulation Act (FCRA), 1976 retrospectively. The aim is to exempt political parties from
scrutiny of funds they have received from abroad since 1976.
• It must be reiterated that the Representation of the People Act and the FCRA bar political parties
from receiving foreign funds.
• Foreign firms can now fund NGOs in India as well as the political parties.
• Impact of the amendment: More NGOs will try to become political parties. As the political donations
are tax free. Under Section 13A of the Income Tax Act, political parties are 100% tax exempt for
income derived from any source, including business income.

5.4. Foreign Aid from India

India has been one of the major receive of development aid. But over the last 3 years, India has
has given more aid to foreign countries than it has received. In the financial year 2015-16 India
gave Rs. 7719.65 crores as aid whereas it received Rs. 2,144.77 crore in aid from foreign
countries and global banks
Development Aid to foreign countries not only serves economic objectives but also as a
strategic tool.
• India wants to project itself as major economic power and rightful claimant to permanent
membership to UNSC.
• Neighborhood First Policy: The neighborhood is the biggest recipient of aid from India.
Bhutan for years have received the biggest chunk of Indian aid with Rs. 5,368.46 crores in
2015-16, primarily aimed at developing hydro-electric power. Also India is 2 nd largest donor
in Afghanistan.
• Ethnic Issues: In Sri Lanka, India is undertaking the construction of houses for rehabilitation
of Tamil population displaced by nearly three decades long war.
• Soft Power: India offer aid to extend the reach of its soft power.
• Another major reason is to counter the influence of China in India’s neighborhood.
• South Asia is disaster prone and many countries in the regions can’t carry out relief work on
its own.

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6. Microfinance Institutions
6.1. What are Microfinance Institutions?
Microfinance, also called microcredit, is a type of banking
service that is provided to unemployed or low-income
individuals or groups who otherwise would have no other
access to financial services.
• Microfinance institutions (MFIs) are financial
institutions working towards the upliftment of the
needy and underprivileged section of the society by
providing short-term loans to set up their own
venture. They take a minimum or very calculated risk
and fund the interested borrowers to help them get
trained, setup and run a small-scale business.
• MFIs operate in a number of forms and shapes in
India:
o Joint Liability Groups
o Self Help Groups
o The Grameen Bank Model
o Rural Cooperatives.
• The The lending system of the MFIs is completely
different from that of the traditional banking sector.
In Microfinancing sector, an official gets appointed by
the concerned financial institution who can get in
touch with the group to discuss the loan application
and disbursal procedure.
• He/she understands the skills and requirements of the applicant first and then on the basis
of that he/she finalizes the amount.
• The appointed officer not only understands the business that the borrower is currently
conducting or interested to start in future, but he or she also analyses the risk factor
associated with it.
6.2. Role of Microfinance Institutions in Development
• Women Empowerment:
Microfinance institutions
are playing a major role
in empowering the
women force in India. By
offering financial
services to the poor
unprivileged women of
the country, the
institutions have opened
a door for their
economic growth.
Uneducated, poor and
unemployed women
usually don't get access to loans from typical lending organizations and this is where the
MFIs have come to their help.

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• Rural Development: More than subsidies, poor need access to credit. Absence of formal
employment make them non 'bankable'. This forces them to borrow from local
moneylenders at exorbitant interest rates. MFIs enhance credit to poor even in the
absence of formal mortgage.
• Financing the unfinanced: The microfinance sector consistently focuses on understanding
the needs of the poor and on devising better ways of delivering services in line with their
requirements, developing the most efficient and effective mechanisms to deliver finance to
the poor.
• The World Bank estimates that more than 500 million people have directly or indirectly
benefited from microfinance-related operations.
• The benefits of microfinance extend beyond the direct effects of giving people a source for
capital. Entrepreneurs who create successful businesses, in turn create jobs, trade, and
overall economic improvement within a community.
• Empowering women in particular may lead to more stability and prosperity for families and
subsequently in the society.
6.3. Issues Related to Microfinance Institutions
• Higher rates of Interest: MFIs’ charge a very high rate of interest (12-30%) as compared to
commercial banks (8-12%). Recently, the RBI (India’s regulatory bank) announced the
removal of upper limit of 26% interest on MFI loans. This has worsened the situation for
customers and led to farmer’s suicide in states like Andhra and Maharashtra.
• Over-dependence on banking sector: Around 80% of their funds come from banks. Most
of these are private banks charge a high rate of interest and also the term of loans is of
shorter period. It makes them incompetent and less reactive to cases of default and
delinquencies.
• Lack of awareness of financial services: Financial literacy is very low in India. About 76% of
the population do not understand basic financial concepts. MFIs struggle to make their
business more financially viable due to this lack of awareness
• Regulatory Issues: RBI is the regulator for MFIs. But needs and the anatomy of micro
finance industry is supremely different from that of banks. Regulatory issues have led to
sub-optimal performance and failure in the development of new financial products and
services
• Appropriate Model: Most of the MFIs follow SHG or JLB model. Most of the time selection
of model is not scientific in nature. It affects the sustainability of the organisation in the
long-run and also increases the risk of borrowings for the poorer section beyond they can
bear.
6.4. Suggestions to Improve the Working of Microfinance Institutions
• There is need for field supervision of MFIs to check ground realities and the operational
efficiency of such institutions.
• Also incentives should be offered to MFIs for opening branches in unbanked villages, so as
to increase rural penetration.
• Also MFIs be encouraged to offer complete range of products to their clients. Transparent
pricing and technology implementation to maintain uniformity and efficiency are among
the others which these institutions should adopt.
• Inability of MFIs in getting sufficient funds is a major hindrance in the microfinance growth
and so these institutions should look for alternative sources of funds.
• Some of the alternative fund sources include outside equity investment, portfolio buyouts
and securitization of loans which only a few large MFIs are currently availing.

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• Information and technology can induce massive impact on the state of credit market
accessibility which remains the most significant issue when it comes to availability of formal
loans at market price.
• Indian microfinance industry came a long way from 1975 with the development of RRB
(Regional and Rural Banks). Smooth functioning of Indian microfinance industry can be
enabled through setting up of a separate regulatory authority to discourage malpractice
and political influence.
• Strengthening the credit check and debt collection processes and educating the villagers
about products and consequences is important.

7. Societies, Trusts, Donors, Charities and other Stakeholders

The law concerning Societies, Trusts, Waqfs and other endowments in India can be placed in
three broad groupings:
• Societies registered under the Societies Registration Act, 1860 and various States
amendments on it after 1947;
• Those engaged in pure religious and charitable work registered under the Religious
Endowments Act, 1863; the Charitable and Religious Trusts Act, 1920; the Waqf Act, 1995
and similar other State Acts;
• Trusts and charitable institutions registered under the Indian Trusts Act, 1882; Charitable
Endowments Act, 1890; the Bombay Public Trusts Act, 1950; and similar other State Acts.
7.1. Societies
A Society is basically an association formed by seven or more persons with some common
objectives for promotion of literature, fine arts, science etc. There may or may not be some
common asset to start with but, in course of time, the Society can acquire assets. They are
registered under Societies registration Act, 1860.

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Many of State legislations (through post-Independence amendments) went for widespread

governmental controls to deal with abuses, malfeasance and nonfeasance of Societies. The
legal measures include:
• State’s power of enquiry and investigation;
• cancellation of registration and consequent dissolution of Societies;
• supersession of the Governing Body;
• Appointment of administrator;
• Dissolution; and
• Deletion of defunct organisations.
7.2. Trusts, Religious Endowments and Waqfs
Trusts, Endowments and Waqfs are legally created as modes of property arrangement/
settlement dedicated for definite charitable and religious purposes. The details with regard to
their incorporation, organisational structure and distribution of functions and powers are
governed by the provisions of the specific law under which they are registered.
Broadly, such organisations can assume a legal personality in the following five ways:
• By way of formal registration before the Charity Commissioner / Inspector General of
Registration under the respective State Public Trusts Act e.g. the Bombay Public Trusts Act,
1950, the Gujarat Public Trusts Act etc.;
• By invoking interference of civil courts to lay down schemes for governing a Trust under
Sections 92 and 93 of the Civil Procedure Code;
• By registering the Trust deed of a Public Charitable Trust under the Registration Act, 1908;
• By notifying an organisation in the list of Charitable Trusts and Religious Endowments which
are supervised by the Endowments Commissioner of the State or by a Managing Committee
formed under the Charitable Endowments Act, 1890 or under other State laws on Hindu
Religious and Charitable Endowments; and
• By creating a Waqf which could be managed under the provisions of the Waqf Act, 1995.
7.2.1. Trusts
Trust is a special form of organisation which emerges out of a will. The will maker exclusively
transfers the ownership of a property to be used for a particular purpose. If the purpose is to
benefit particular individuals, it becomes a Private Trust and if it concerns some purpose of the
common public or the community at large, it is called a Public Trust.
Difference between Trust and Society
• The subjects on which an institution can be registered under the Societies Registration Act,
1860 are practically the same as those on which a Trust could also be formed.
• The Society, prima facie, is a 28 democratic entity, as all its members (at least seven in
number) have an equal say in its running whereas in a Trust, control over the property
remains fully in the hands of the Trustees and depending on the clarity of the will, such a
management continues to be in existence for a long time.
• Government intervenes only when Trustees change or the Trust becomes too old to be
managed as per stipulations of the original will, or on grounds of malfeasance or abuse of
trust.
7.2.2. Religious Endowments
• Religious Endowments and Waqfs are variants of Trusts which are formed for specific
religious purposes e.g. for providing support functions relating to the deity, charity and
religion amongst Hindus and Muslims respectively.

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• Unlike Public Trusts, they may not necessarily originate from formal registration, nor do
they specifically emphasise on a triangular relationship among the donor, Trustee and the
beneficiary.
• Religious endowments arise from dedication of property for religious purposes. The
corresponding action among the Muslim community leads to the creation of Waqfs. Waqfs
tie up the property and devote the usufruct to people.
• The Indian Constitution recognizes freedom to manage religious affairs as one of the
fundamental rights of its citizen. According to Article 26 - “Subject to public order, morality
and health, every religious denomination or any section thereof shall have the right:
o to establish and maintain institutions for religious and charitable purposes;
o to manage its own affairs in matters of religion;
o to own and acquire movable and immovable property; and
o to administer such property in accordance with law.
• Though, the above provision gives freedom to create Trusts / charitable institutions for
religious purposes, it puts some rider on administration of such property “in accordance
with law” – Article 26(d).
7.2.3. Waqfs in India
• Under Muslim rule in India, the concept of Waqf was more widely comprehended as
aligned with the spirit of charity endorsed by the Quran. Waqf implies the endowment of
property, moveable or immovable, tangible or intangible to God by a Muslim, under the
premise that the transfer will benefit the needy. As it implies a surrender of properties to
God, a Waqf deed is irrevocable and perpetual
• Currently, 300000 Waqfs in India are being administered under various provisions of the
Waqf Act, 1995. This Act is applicable throughout the country except for Jammu and
Kashmir and Dargah Khwaja Saheb, Ajmer.
• The management structure under the Act consists of a Waqf Board as an apex body in each
State. Every Waqf Board is a quasi-judicial body empowered to rule over Waqf-related
disputes. At the national level, there is Central Waqf Council which acts in an advisory
capacity.
• The Waqf Act was amended in 2013. The amended Waqf Act, has made provisions for
strengthening the Waqf Institution and streamline their functioning. Some of the important
provisions incorporated in the Act are-
o The definition of Waqf has been modified to allow non-Muslims also to create Waqf
o If the tenancy, lease or license has expired or been terminated, this would be
considered as encroachment
o The Central Waqf Council has been empowered to issue directive to the State Waqf
Boards on their financial performance, survey, maintenance of Waqf deeds, revenue
records, and encroachment of Waqf properties seeking annual report and audit report
o Any dispute arising out of a directive issued by the Central Waqf Council to be referred
to a Board of Adjudication to be constituted by the Central Government, to be presided
over by a retired judge of the Supreme Court or a retired Chief Justice of a High Court
o The Establishment of State Waqf Boards within 6 months from the date of
commencement of this Act
o ‘Sale’, ‘Gift’, ‘Mortgage’, ‘Exchange’ and ‘Transfer’ of Waqf properties have been
prohibited to curb alienation of Waqf properties
o ‘Lease’ of Waqf properties is being allowed. However, ‘Lease’ of Mosque, Dargah,
Khanquah, Graveyard and Imambara has been prohibited
o The lease period has been enhanced uniformly upto 30 years for commercial activities,
education or health purposes with the approval by the State Govt. because of the long
gestation periods of such projects and the long periods of return on capital employed.

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The maximum period of lease of agricultural land is fixed for 3 years. Further, lease
beyond 3 years is to be intimated to the State Government and it would become
effective only after 45 days.
7.3. Trade Unions
• In terms of Section 2 of the Trade Unions Act, 1926, a “Trade Union means a combination,
whether temporary or permanent, formed primarily for the purpose of regulating relations
between workmen and employers or between workmen and workmen or between
employers and employers, or for imposing restrictive conditions on the conduct of any
trade or business, and includes any federation of two or more Trade Unions.”
• The objective of the Trade Unions Act is to provide a legal existence and protection to the
Trade Unions as defined above.
• Importantly, it is also provided that no member of the Council of Ministers or a person
holding an office of profit (not being an engagement or employment in an establishment or
industry with which the Trade Union is connected), in the Union or a State, shall be a
member of the executive or other office bearer of a registered Trade Union.

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8. Previous Year Vision IAS GS Mains Test Series Questions

1. Self-help group (SHG) bank linkage program portrays it as an effective tool being used
in various countries to approach a range of socioeconomic issues. Explore the possible
performance and sustainability of this type of program in India?
Approach:
• Describe the Self-help group (SHG) bank linkage program in introduction.
• Performance should cover positive outcomes and challenges faced.
• Exploring the sustainability require suggestions for strengthening the program.
Answer:
A sizeable share of population in India continues to remain outside the formal banking
system despite considerable expansion in branch network. Alternative models are being
experimented with to meet the objective of financial inclusion. The SHG-Bank linkage
model is the indigenous model of micro-credit evolved in India and has been widely
acclaimed as a successful model.
SHGs are small, economically homogeneous affinity groups of rural poor (10-20)
members each, voluntarily formed to save and mutually contribute to a common fund to
be lent to its members as per the group members’ decision. SHGs can, therefore be
called member - run mini – banks. The SHG - Bank Linkage Programme (SBLP) was an
outcome of pilot projects during the 1980s for improving access of India’s rural poor to
formal institutional financial services. For banks, it was a way of reducing their
transaction costs by dealing with groups of people rather than individuals and reducing
their risks through ‘peer pressure’ and making people save.
Positive Outcomes of the SHG - Bank Linkage Programme
• Financial Inclusion and thus the empowerment of Poor Women
• Loan Repayments - very high on-time recovery
• Reduced the incidence of poverty through increase in income, and also enabled the
poor to build assets and thereby reduce their vulnerability.
• Enabled households that have access to it to spend more on education than non-
client households
• Reduced child mortality, improved maternal health and the ability of the poor to
combat disease through better nutrition, housing and health - especially among
women and children.
• Contributed to a reduced dependency on informal money lenders and other non-
institutional sources.
• It has offered space for different stakeholders to innovate, learn and replicate. As a
result, some NGOs have added micro-insurance products to their portfolios, a
couple of SHG federations have experimented with undertaking livelihood activities
and grain banks have been successfully built into the SHG model in the Eastern
Region.
Challenges Faced
• Wide regional disparity both in terms of the spread of SHGs linked to banks and
cumulative bank loans disbursed under the programme. While the Southern Region
accounted for 48.2 per cent of the total SHGs, the share of North- Eastern Region
was just 3.4 per cent. In terms of share in the total bank loans to SHGs, the region-
wise differential gets further magnified.

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• Even wider intra-regional disparity among the constituent States in SHG spread. In
the Southern Region, SHGs per lakh population varied between 891 in Andhra
Pradesh and 435 in Kerala. In the North-Eastern region, Assam accounted for 3.1
per cent of the total SHGs while the rest of the six States in the region had a
negligible share in the total SHGs.
• There does not appear to be a one-to-one correspondence between banking
outreach and spread of SHG movement. Even with similar banking network, SHG
spread varies between Regions and States indicating that other local factors are
equally important.
• The studies point to the coverage of the upper strata of the poor and not so much
to the ultra-poor. Except the government-sponsored programmes that are
mandated to focus on poor, the other efforts do not prioritise the poorest.
Suggestions for long term sustainability of SHG-Bank linkage program:-
• Encouraging SHGs in Excluded Regions
• Capacity building of Government functionaries
• Check on corruption/commission while sanctioning and upgrading the loan
• Maintenance of participatory character of SHG movement
• Identification of poor by the NABARD
• Incentive package for NGOs
• Avoid ‘ever-greening’ of loans
• Transparency in maintenance of records
• SHGs to evolve norms for distribution of surplus
• Identification of income/employment generating activities
• ICT technology and product innovation

2. Difference between SHGs and Cooperative Societies.

Approach:
• Explain that an SHG is an informal yet accountable structure that enables income-
generating activities unlike a cooperative, which is more formal, mostly unwieldy
and marked by an impersonal outlook.
Answer:
A co-operative society is a voluntary association of persons started with the objective of
serving its members. It is primarily designed for promotion of economic interest of its
members. It is a self-governing institution.
On the other hand, SHG denotes an association of small group of self-employed people
for welfare of its members. It is also a voluntary association wherein groups come
together for redressed of common problems. It facilitates a co-operative, participative
and empowerment culture. Though both have similarities, certain differences still exist:
• A Self Help Group is an informal structure unlike a co-operative society, which is a
more formal and registered organisation.
• Self Help Groups are easy to organise while co-operative societies need a more
organised structure.
• Self Help Group consists of 10-20 members while co-operative society has
unrestricted number of members.
• Members of Self Help Group come together for redressed of common and
individual problems. In co-operative societies, individual problems remain

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unaddressed.
• Self Help Group has unlimited roles like micro-credit, income generation,
community development, special uplifting etc. Role of co-operative societies is
restricted to economic activity especially marketing.
• Self Help Group has autonomous decision-making while autonomy is restricted in
co-operative societies.

3. Critically analyse the change in the nature of civil society in India due to the entry of a
large number of professional and well-funded NGOs in it. Also discuss the dilemmas
and the limits that this development has created for the civil society.
Approach:
• Explain the concept of civil society.
• Trace the background of civil society in India, preferably from the pre-independence
period. Then explain how the nature of civil society has changed over the years due
to entry of NGOs.
• Thereafter, discuss whether this has created new dilemmas. This can be done only
when the nature of civil society has been clearly explained. Also discuss the
limitations of the NGO sector, in light of the role that the civil society is expected to
perform.
Answer:
(The answer exceeds the word limit to explain the issues clearly and holistically.)
Civil society organizations in India emerged out of the twin processes of resistance to
colonialism and the development of a self-reflective attitude to traditional practices
that were increasingly found unacceptable in the light of modern systems of education
and liberal ideologies.
In the pre-independence period, at least seven categories of associations constituted
the space of civil society, viz. social and religious reform movements, Gandhian
organizations, a number of self-help organizations that grew up around trade unions,
movements against social oppression particularly the anti-caste movement,
associations to petition the colonial government to extend English education and
employment opportunities to the educated middle classes formed by professional
English speaking Indians, affiliated groups of the Congress party, social and cultural
organizations committed to the project of establishing a Hindu nation.
In the post-independence era, a number of civil society organizations took root both to
confront violations of democratic rights and to fill the void caused by the development
deficit of the state. For instance, from the late 1970s, the struggle for gender justice,
the anti-caste movement, the movement for protection of civil liberties (the People’s
Union for Civil Liberties; PUCL and the People’s Union for Democratic Rights; PUDR), the
movement for a sound environment (the Chipko movement), the struggle against
mega-development projects that have displaced thousands of poor tribals and hill
dwellers (the Narmada Bachao Andolan),the campaigns for the right to food, to work,
to information, for shelter, for primary education and for health, mobilized in civil
society.
However, since 1990’s professional and well-funded NGOs that claimed to speak on
behalf of different constituencies appeared on the scene. Though it is not that NGOs
are not civil society organizations, but they are different from social associations, or
movements, or citizens’ groups, or professional associations for they may not be

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membership-based organizations. A reading and a discussion club, for instance, is based

on membership and at some point in time it has to be responsible to its constituency.
Thus when such development agencies come into the space of civil society and proceed
to act on behalf of citizens, it is not exactly clear as to whom these organizations have
consulted and to which constituency they are responsible to. Moreover, even the
agenda and mandate of these NGOs is not too clear at times.
Further, the entry of professional NGOs to civil society has brought a qualitatively
different way of doing things –campaigns rather than social movements, lobbying
government officials and the media rather than politicizing citizens, reliance on
networks rather than civic activism, and a high degree of dependence on the judiciary
rather than direct action. The campaigns run by them have mostly been successful only
when the Supreme Court has intervened on the issue.
Though court interventions have helped campaigns to achieve their goals, the
intervention of the judiciary illustrates the paradox of civil society mobilization. It is
assumed that civil society groups have the capacity to address the state and to oblige it
to heed their demands. However, the Indian state has proved more responsive to Court
in junctions, compelling more and more groups to appeal to judicial activism. In part,
the Court has adopted a proactive stance because the agenda of contemporary civil
society mobilization is self-limiting and confined to the framework of the Constitution.
While NGOs that dominate civil society have tried to deepen democracy by focusing
attention on issues that have been left untouched by political representatives- whether
the issue be civil liberties, communalism, the right to food, the right to work, or the
right to information- however, they have also created some new dilemmas. Firstly,
NGOs are increasingly in the business of service delivery. Therefore, they are hardly in
the business of acting as “a catalyst for social, economic, and political changes
favouring the poor, marginalized, and disadvantaged”.
Secondly, whereas our parliamentary representatives have not proved democratic
enough, organizations that seek to deepen democracy may not be representative of the
political will at all. Most NGOs are manned by technical experts, who have their own
ideas of what a problem is and what should be done about it. The political context of
citizen politics has been transformed. It is simply no longer enough to concentrate on
elected representatives, how they perform their tasks and how systems of
representation can be made more democratic because non-governmental agents
“stand in” for citizens, speak for them, engage in the politics of advocacy and often
make and unmake policy, without ever having been in touch with the constituency they
purport to represent. And they are not likely to do so because this is simply not their
job and not their mandate. This really means that while NGOs may be in the business of
democracy, they are not in the business of being representative, or accountable to
citizens for their acts of omission and commission.
Moreover, there are limits to the NGO sector too. They are not in any position to
summon up the kind of resources that are required to emancipate citizens from poverty
and deprivation. Moreover, they can hardly implement schemes of redistributive justice
that involve transferring of resources from the better off to the worse-off sections of
society. And the non-governmental sector cannot establish and strengthen institutions
that will implement policy.
More significantly, most NGOs concentrate on either one or a cluster of immediate
issues, leaving the big issues untouched– the huge inequalities of resources in the
country, for instance. Nor do these organizations touch on the source of powerlessness

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and helplessness, in, say, skewed income patterns. They just do not dream the large
and expansive dreams that were dreamt of by earlier generations of social activists–
restructuring existing structures of power and forging new and equitable structures of
social relations.

4. Involvement of civil society in the policy-making process makes a democracy more

participative in nature. Examine the above statement in the context of India.
Approach:
This question requires understanding of the role of civil society in India. You should
highlight the advantages of including civil society in the policy making stage. The
answer can be enriched by citing examples like RTI Act, 12 th Five Year Plan etc. The
answer should end with any recent developments on this and suggestion.
Answer:
In a representative democracy like ours, the representatives of the people are
responsible for law making. However in this era of governance approach, there is an
increased emphasis on the role of civil society in the governance process. More so
there is a realization that civil society should be made a stakeholder at the law making
stage itself along with its role in law implementation and post-facto analysis of the
development programs. India has earlier witnessed some examples of participation of
civil society in the law making process of RTI Act, Sexual harassment of women at
workplace (Prevent, Prohibition and Redressal) Act etc. This can provide following
benefits:
• In a diverse country like India, centralized law making can’t address concerns of all
sections. Participative law making process will ensure that laws address the
concerns of all sections. Thus the quality of laws is improved.
• One of the major problem in India is lack of awareness about laws in the public.
Participation of people in the law making will ensure that they are also aware about
the law.
• Increased awareness about the law will reduce the grievances of the public about
laws and it’ll also ensure better implementation of the laws.
• It’ll increase the accountability of the implementation agencies as the aware people
will be able to hold those agencies accountable for their acts of omission and
commission.
• This will ensure transparency in the administration.
• Laws in India are often jargonized and beyond the understanding of common
people. Participation of people will ensure that laws are made understandable for
the common man.
This would take India from a “representative democracy to a participatory, deliberative
democracy.”
Further, the Cabinet Secretary-led committee has recently decided to institutionalize
public participation in the pre-legislative scrutiny process of law-making in India. The
decision requires every Central government department to publicise the details of a
proposed legislation on the Internet and other media before being introduced in
Parliament. Such a model was followed recently in Kerala in revamping the police bill
where a number of suggestions have been included.
Under the decision, draft bills must be accompanied with an explanatory note outlining

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the essential provisions of the bill and its impact on the environment and lives of
affected people. The public must then be given at least 30 days to comment. Following
publication, these comments are to be submitted to the relevant parliamentary
standing committee examining the bill.

5. While difference in opinions exist between the State agencies and the Voluntary
Organizations, the State recognizes the need to preserve, protect and nurture an
enabling environment for the development of the Voluntary sector. Explain in context
of the National Policy on the Voluntary sector.
Approach:
• A brief introduction about the importance of the role played by the VOs.
• Explain the statement in question about the difference in opinions/methods
between the VOs and State agencies on various issues.
• Thereafter, mention the role of promotion of VOs by the government and how this
can be seen in the light of National Policy in this area
• Highlight the pro-active role of the Govt. towards the Voluntary Sector. These
include:
o Partnership in Development
o Establishing an Enabling Environment for the Voluntary Sector
o Encouraging Self-regulation to ensure transparent and accountable systems of
governance and management of VOs.
• Conclude the answer on a positive note.
• You may give in certain examples – such as the Anti-Kundakulam protest by PMANE
etc.
• Caution: Avoid bluntly putting down the objectives of the National Policy on
Voluntary Sector.
Answer:
• The country faces a number of complex problems that require adaptive, multi-
sectoral solutions where sustained social mobilization is particularly important.
• Though there exist difference of opinions and working amongst the two entities,
such areas urgently require strategic collaboration between the Government and
VOs. The voluntary sector serves an effective non-political link between the people
and the Government. Both of them differ in their opinions on a number of issues
ranging from environment, resource utilization, displacement of people etc.
• National Policy on the Voluntary Sector-2007 recognizes three instruments of
partnership, viz., (i) consultation, through a formal process of interaction at the
Centre, State and District level; (ii) strategic collaboration to tackle complex
interventions where sustained social mobilization is critical over the long term; and
(iii) project funding through standard schemes.
Partnership in Development
• VOs offer alternative perspectives; committed expertise; an understanding of the
local opportunities and constraints; and the capacity to conduct a meaningful
dialogue with communities, particularly those that are disadvantaged. The
government therefore considers it essential that the Government and the Voluntary
Sector work together.
• It must be based on the basic principles of mutual trust and respect, with shared
responsibility and authority.

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Establishing an Enabling Environment for the Voluntary Sector

• The government through the National Policy for VOs aims to provide a set of laws,
policies, rules and regulations relating to VOs categorically safeguard their
autonomy, while simultaneously ensuring their accountability.
• The independence of VOs will allow them to explore alternative paradigms of
development to challenge social, economic and political forces that may work
against public interest and to find new ways to combat poverty, deprivation and
other social problems.
• It shall also enable VOs to legitimately mobilize necessary financial resources from
India and abroad (tax exemptions, regulation through FCRA). At the same time, the
Government will consider tightening administrative and penal procedures to ensure
that these incentives are not misused by paper charities for private financial gain.
• The Government will encourage all relevant Central and State Government agencies
will introduce time bound procedures for dealing with the VOs. These would cover
registration, income tax clearances, financial assistance, etc. There would be formal
systems for registering complaints and for redressing grievances of VOs.
Encouraging Self-regulation to ensure transparent and accountable systems of
governance and management of VOs.
• The Government encourages the evolution of, and subsequently accord recognition
to, an independent, national level, self-regulatory agency for the voluntary sector.
• The Government will encourage support organizations, and VO networks &
federations to facilitate discussion and consensus building on these issues.
This Policy is a commitment to encourage, enable and empower an independent,
creative and effective voluntary sector, with diversity in form and function, so that it
can contribute to the social, cultural and economic advancement of the people of India.

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6. Unhealthy competition between Self Help Groups (SHGs) and Panchayati Raj
Institutions (PRIs) reduces the effectiveness of both. Discuss. How can creating a
synergy between the two help in addressing development challenges at the sub-
district level?
Approach:
• Briefly define the role and responsibilities of PRIs and how SHGs compete with
these responsibilities.
• Discuss how such an overlap may be unhealthy for the effectiveness of both
institutions.
• Finally discuss how coordination and clear demarcation can bring complementarity
amongst the two. Give examples of successful PRI-SHG linkage.
Answer:
Self-help groups are micro-finance intermediaries. They are generally facilitated by
NGOs, and they advise and train members in a variety of on- and off-farm income-
generating activities. Financial intermediation is generally a primary objective to realize
larger goals like empowering women, developing leadership abilities, increasing school
enrollments, improving nutrition, etc.
As can be seen, PRIs and SHGs have overlapping aims- from poverty alleviation to
enhancing participative democracy. The two institutions sometimes compete with each
other for space in development administration and political processes. SHGs are then
seen as undermining the constitutional roles of PRIs. Following points illustrate the
points of friction:
• SHGs are becoming a conduit for routing number of development schemes.
• Alignment of interests of MFIs, NGOs, corporations and donors with that of SHGs.
They have been increasingly involved with SHGs rather than PRIs in capacity
building.
• Political prejudice due to social compositions of PRIs and SHGs has weakened the
relationship.
• Some States have mandated inclusion of SHG members in various committees (like
Mid-day meal) of the PRI. However, no attempt has been made in this regard.
However, there are number of successful examples where SHGs and PRIs working in
tandem have effected a positive change in the rural society. The Indira Kranti Patham
Yojana by Society for Elimination of Rural Poverty (SERP) in Andhra Pradesh is very
active in improving the livelihoods of rural poor families. These SHGs work under the
Panchayat system for distribution of social security, pensions, wage labour under
NREGS, etc. Kudumbashree (Kerala), a women based participatory poverty eradication
programme, is an SHG movement into which there has been integration of various
Panchayat tiers.
The nature and mandate of both these institutions requires that they operate in
coordination to utilize resource efficiently and produce better outcomes. An
institutional and functional linkage with the SHGs will enhance responsiveness,
accountability and transparency in PRIs.
While at the Gram Panchayat level SHGs could be implementing, monitoring and
evaluating agencies, at the Block and District levels, they can act as a pressure group,
provide feedback and act as watchdogs. However, it is imperative that the capability
and capacity of the SHGs and the PRIs be strengthened for a symbiotic relation.

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7. Despite their location in the non-political domain of civil society, NGOs have ended up
playing a key, if indirect, role in India's politics. Comment.
Approach:
• Introduce by defining Non-Government Organisations (NGOs).
• Discuss the role played by NGOs in Indian society in short.
• Discuss the role (direct/ indirect) played by NGOs in Indian politics.
• Give appropriate examples, wherever necessary.
• Conclude on the basis of above points.
Answer:
NGO is defined as a non-profit private organization that pursue activities to relieve
suffering, promote the interests of the poor, protect the environment, provide basic
social services or undertake community development.
Task-oriented and driven by people with a common interest, NGOs perform a variety of
service and humanitarian functions, bring citizen concerns to governments, advocate
and monitor policies and encourage political participation through provision of
information.
Some NGOs also work for the empowerment of people by mobilizing them on some
public issues and thus graduating from a ‘welfare’ approach. Such NGOs are said to
influence politics, in the following ways:
Some NGOs have engaged in popular mobilization against proposed projects, like
Kundalkulam nuclear project, POSCO plant, Narmada Bachao Andolan etc.
Spearheading movements to provide justice for people affected by such projects has
made NGOs serve as a crucial reference point for political parties and other social
movements.
• Some NGOs are working directly in political sphere:
o Instead of representing people or problems of their constituency,
representative form of democracy has created caste and religion as political
constituency. In such a scenario, some NGOs fill this gap.
o Some NGOs are continuously working for electoral reform.
o Some NGOs are fighting legal battles for upholding the Constitution and law,
and safeguarding the rights of the people, like People’s Union for Civil Liberties.
o Many NGOs are providing public services to people at grassroots level, making
them enjoy the popular support.
• Many NGOs are actively advocating policy changes for the benefit of the common
good, like Greenpeace. Their advocacy affects policy decisions, and thereby they
are said to play a political role.
The blurring of the boundaries between NGOs and movement groups, and between
NGOs and the state, is just one of many factors that has allowed NGOs to enter
gradually and often indirectly, into the domain of electoral politics.
However, many NGOs have been found to be guilty of financial irregularities and
working against the national interest, which needs to be rectified. Democratic
decentralization has provided an opportunity for NGOs to enter into the political
domain. But in the end it’s the developmental agenda of the NGOs which is the
quintessential feature that aligns it with the politics.

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8. Keeping in mind the importance of NGOs in India's development process it is

imperative that adequate legal and regulatory mechanisms should be in place.
Discuss in the context of recent developments.
Approach:
• Introduce with the importance of NGOs and their work.
• Mention recent cases which highlighted the issue with regard to functioning of
NGOs.
• Give arguments in favour and against regulation. Mention specific examples and
recommendations or rulings where possible.
Answer:
The World Bank defines NGOs as “private organizations that pursue activities to relieve
suffering and promote the interests of the poor.” They have played an important role in
India’s development process by carrying out supporting activities. NGOs provide last
mile delivery of services where the State does not or cannot reach. NGOs provide
feedback about efficacy of government schemes and complement in their
implementation. National policy on Voluntary Sector, 2007 recognised explicitly the
role of voluntary sector in national development.
Their wide scope of activities which affect crucial public interests requires that there be
a proper legal and regulatory mechanism in place. Further, to enable them to function
in an atmosphere of certainty, an ‘adequate’ framework is necessary.
Recent developments
• In 2015, rules under Foreign Contribution Regulation Act (FCRA) were amended to
regulate foreign funding of NGOs and the FCRA license of Greenpeace India was
cancelled
• In recent years, there have been activist or overtly political NGOs which take
recourse to policy advocacy, lobbying, mass mobilisation and strident campaigning
to usher in change in government policies or play the role of a watchdog.
• The government had to probe the bank accounts of foreign funded NGOs over
discrepancies.
Case for regulation:
Apart from the developments mentioned above, the other reasons are:
• The NGO industry has grown at a very fast pace in recent years.
• Misuse funds by floating NGOs.
• Most NGOs work with inadequately trained professionals.
• There is an increasing monopolization of their leadership.
• Many are funded by the government, and therefore should be scrutinised
• The Supreme Court too, in a recent judgement, has spoken in favour of this step.
• Less than 10% submit their accounts with the Registrar of Societies, as mandated
by law.
• Foreign funded NGOs’ agendas might be antithetical to national interests.
Case against regulation:
• Already many measures of regulation are in place. More measures might lead to
over-regulation.

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• Senior management personnel have been brought under the definition of “public
servants” under the Lokpal and Lokayukta Act, 2013 and thus are required to
disclose their assets and liabilities, along with those of their spouse and children.
• More regulations might hamper the functioning of well-meaning NGOs.
• It may restrict their ability to explore alternative paradigms of development to
challenge social, economic and political forces.
Hence, while it is desirable and acceptable to regulate NGOs, the government should
take note as to not stifle their voices with over-regulation.

9. Previous Year UPSC GS Mains Questions

1. UPSC 2013: The legitimacy and accountability of Self Help Groups (SHGs) and their patrons,
the micro-finance outfits, need systematic assessment and scrutiny for the sustained
success of the concept. Discuss.
2. UPSC 2014: The penetration of self-help groups (SHGs) in rural areas in promoting
participation in development programmes is facing sociocultural hurdles. Examine.
3. UPSC 2015: Examine critically the recent changes in the rule governing foreign funding of
NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976.
4. UPSC 2015: The Self Help Group (SHG) Bank Linkage Program (SBLP), which is India’s own
innovation, has proved to be one of the most effective poverty alleviation and women
empowerment programme. Elucidate.
5. UPSC 2015: How can be the role of NGOs be strengthened in India for development works
relating to protection of the Environment? Discuss throwing light on the major constraints.
6. UPSC 2016: “In the Indian governance system, the role of non-state actors has been only
marginal.” Critically examine this statement.
7. UPSC 2017: "The emergence of the Self-Help Groups (SHGs) in contemporary times points
to the slow but steady withdrawal of the State from developmental activates." Examine the
role of the SHGs in developmental activities and the measures taken by the Government of
India to promote the SHGs.

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recording or otherwise, without prior permission of Vision IAS.

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VISION IAS

VALUE ADDITION MATERIAL – 2018

PAPER II: GOVERNANCE

IMPORTANT ASPECTS OF GOVERNANCE

Copyright © by Vision IAS

All rights are reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted
in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior
permission of Vision IAS

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IMPORTANT ASPECTS OF GOVERNANCE

Contents
1. Governance ................................................................................................................................ 3

1.1. What is Governance? .......................................................................................................... 3

1.2. Stakeholders of Governance ............................................................................................... 3

1.3. Good Governance ............................................................................................................... 3

1.4. Strategies for good governance .......................................................................................... 5

1.5. The Worldwide Governance Indicators project – World Bank ............................................ 5

2. Governance in India ................................................................................................................... 6

2.1. Dimensions of Governance in India .................................................................................... 6

2.2. Governance Issues in India.................................................................................................. 8

2.3. Good Governance Initiatives in India .................................................................................. 9

2.4. Minimum Government, Maximum Governance ................................................................. 9

3. Citizen Charter ............................................................................................................................ 9

3.1. What is Citizen Charter?...................................................................................................... 9

3.2. Origin and the concept of Citizen Charter........................................................................... 9

3.3. Significance of Citizen Charter .......................................................................................... 10

3.4. Citizen Charter in India ...................................................................................................... 10

3.5. Issues with Citizen Charters in India: ................................................................................ 11

3.6. Recommendations of 2nd ARC report .............................................................................. 11

4. Sevottam Model ....................................................................................................................... 11

4.1. What is Sevottam Model? ................................................................................................. 11

4.2. Significance of the model .................................................................................................. 12

4.3. Time Bound Delivery of Services ....................................................................................... 12

5. Social Audit............................................................................................................................... 13

5.1. What is Social Audit?......................................................................................................... 13

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5.2. Need of Social Audit .......................................................................................................... 13

5.3. Principles of Social Audit ................................................................................................... 13

5.4. Significance of Social Audit ............................................................................................... 14

5.5. Limitations of Social Audit ................................................................................................. 15

5.6. Way Forward ..................................................................................................................... 15

6. E-Governance ........................................................................................................................... 15

6.1. What is E-governance?...................................................................................................... 15

6.2. Potential of e-governance ................................................................................................. 16

6.3. Models of e-governance ................................................................................................... 16

6.3.1. Government to Citizen (G2C) ..................................................................................... 16

6.3.2. Government to Government (G2G) ........................................................................... 16

6.3.3. Government to Businessmen (G2B) ........................................................................... 16

6.3.4. Government to Employees (G2E) ............................................................................... 17

6.4. E-Governance Initiatives in India ...................................................................................... 17

6.4.1. Government to Citizen (G2C) Initiatives: ................................................................... 17

6.4.2. Government to Business (G2B) Initiatives ................................................................. 18

6.4.3. Government to Government (G2G) Initiatives........................................................... 18

6.5. Challenges ......................................................................................................................... 18

6.5.1. Environmental and Social Challenges ........................................................................ 18

6.5.2. Economic Challenges.................................................................................................. 19

6.5.3. Technical challenges ................................................................................................... 19

6.6. Recommendations of 2nd ARC on e-governance ............................................................... 19

6.7. Ease of Governance........................................................................................................... 20

7. Vision IAS GS Mains Test Series Questions............................................................................... 21

8. Previous Year UPSC Questions ................................................................................................. 30

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1. Governance
1.1. What is Governance?
The United Nations Development Programme (UNDP), 1997, defined governance as “the
exercise of economic, political and administrative authority to manage a country’s affairs at all
levels. It comprises the mechanisms, processes and institutions, through which citizens and
groups articulate their interests, exercise their legal rights, meet their obligations and mediate
their differences.”
In 1993, the World Bank defined governance as the method through which power is exercised
in the management of a country’s political, economic and social resources for development.
In simple words, Governance is the process and institutions through which decisions are made
and authority in a country is exercised. Governance can be used in several contexts such as
corporate governance, international governance, national governance and local governance.
Thus governance focuses on the formal and informal actors and institutions involved in
decision-making and implementing those decisions.
1.2. Stakeholders of Governance
Government is one of the key actors in governance. Other actors may include political actors
and institutions, interest groups, civil society, media, non-governmental and transnational
organizations. The other actors involved in governance vary depending on the level of
government.
Typically, the stakeholders of
governance at national level
can be categorised into three
broad categories – State,
Market and Civil Society.
1. The State includes the
different organs of the
government (Legislature,
Judiciary and Executive)
and their instrumentalities, independent accountability mechanisms etc. It also consists of
different segments of actors (elected representatives, political executive, bureaucracy/civil
servants at different levels etc.)
2. The Market includes the private sector – organised as well as unorganised – that includes
business firms ranging from large corporate houses to small scale industries/
establishments.
3. The Civil Society is the most diverse and typically includes all groups not included in (a) or
(b). It includes Non-Governmental Organizations (NGOs), Voluntary Organizations (VOs),
media organisations/ associations, trade unions, religious groups, pressure groups etc.

1.3. Good Governance

Governance’ by itself is a neutral term while
`Good Governance’ implies positive attributes
and values associated with the quality of
governance. Good governance is a dynamic
concept and there is much subjectivity involved
in defining the aspects of good governance.

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United Nations Development Programme (UNDP) recognizes eight core characteristics of good
governance:
1. Participatory
2. Consensus oriented
3. Transparent
4. Accountable
5. Responsive
6. Effective and Efficient
7. Equitable and Inclusive
8. Follows the Rule of Law
Understanding the key terms:
Participation: • Participation of all section of society is cornerstone of good governance.
• Participatory governance provides opportunities for citizens to take part
in decision making, implementation and monitoring of government
activities.
• However, participation needs to be informed and organized. This
includes freedom of association and expression as well as an organized
civil society.
Consensus • Good governance requires mediation of the different interests in society
oriented to reach a broad consensus on
o what is in the best interest of the whole community and
o how this can be achieved.
• It also requires a broad and long-term perspective on what is needed for
sustainable human development and how to achieve the goals of such
development.
Rule of Law • Good governance requires fair legal frameworks that are enforced
impartially.
• It also requires full protection of human rights, particularly those of
minorities and vulnerable sections of the society.
• An independent judiciary and an impartial and incorruptible police force
is sine qua non for impartial enforcement.
Transparent • Transparency means that decisions taken and their enforcement are
done in a manner that follows rules and regulations.
• It also means that information is freely available in easily understandable
forms and directly accessible to those who will be affected by such
decisions and their enforcement.
• It also means that enough information is provided and that it is provided
in easily understandable forms and media.
• For example, in India the Right to Information (RTI) Act has been a
powerful instrument in the hands of people to ensure transparency in
the decision making process of executive.
Accountable • Accountability is the acknowledgment and assumption of responsibility
for actions, products, decisions, and policies.
• The components of accountability are answerability, sanction, redress
and system improvement.
• In general an organization or an institution is accountable to those who
will be affected by its decisions or actions.
• Accountability cannot be enforced without transparency and the rule of
law.

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Responsive • Good governance requires that institutions and processes try to serve all
stakeholders within a reasonable timeframe.
• Redressal of citizen grievance, citizen orientation, citizen friendliness and
timely delivery of services are key component of responsive governance.
Effective and • Good governance means that processes and institutions produce results
Efficient into the optimum use of resources at their disposal.
• Thus it also covers the sustainable use of natural resources and the
protection of the environment.
Equitable and • A society’s wellbeing depends on ensuring that all its members feel they
Inclusive have a stake in it and do not feel excluded from the mainstream of
society.
• This requires all groups, particularly the most vulnerable, have
opportunities to improve or maintain their well-being.
Many sources include “Strategic Vision” as a 9th principle of Good Governance.
Strategic Vision: A broad and long-term perspective on good governance and human
development is required. There is also an understanding of the historical, cultural and social
complexities in which that perspective is grounded.
1.4. Strategies for good governance
• Reorienting priorities of the state through appropriate investment in human needs
• Provision of social safety nets for the poor and marginalized
• Strengthening state institutions
• Introducing appropriate reforms in the functioning of Parliament and increasing its
effectiveness
• Enhancing Civil Services capacity through appropriate reform measures that matches
performance and accountability
• Forging new alliances with civil society
• Evolving a new framework for government-business cooperation
1.5. The Worldwide Governance Indicators project – World Bank
As mention above, World Bank defines Governance as the process and institutions by which
authority in a country is exercised.
Specifically, governance is:
• the process by which governments are selected, held accountable, monitored, and
replaced;
• the capacity of governments to manage resources efficiently, and to formulate, implement,
and enforce sound policies and regulations; and
• the respect of citizens and the state for the institutions that govern economic and social
interactions among them

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‘The Worldwide Governance Indicators project’ – By World Bank ranks more than 200
countries on six key indicators of governance. The six indicators are:
1. Voice and Accountability
2. Political Stability and Absence of Violence
3. Government Effectiveness
4. Regulatory Quality
5. Rule of Law
6. Control of Corruption
These aggregate indicators combine the views of a large number of enterprise, citizen and
expert survey respondents in industrial and developing countries.

2. Governance in India
2.1. Dimensions of Governance in India
Department of Administrative reforms and Public grievances (DARPG) in its report “State of
Governance – A framework of assessment” has broken down governance into five dimensions
viz. political, legal& judicial, administrative, economic and social &environmental dimensions.

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1. Political Dimension
Political dimension being the most essential aspect of governance looks at the quality of
political contestation, conduct of individuals and institutions representing the people, use
and abuse of political authority, decentralization of powers and citizen’s faith in the political
system.
It has four key components:
• Exercise of franchise
• Profile and conduct of Political Representatives, Political Parties and the Political
Executive
• Functioning of Legislature
• Political Decentralisation
2. Legal & Judicial Dimension of Governance
This dimension seeks to measure whether the state’s exercise of power is within its
boundaries. Also its ability to effectively maintain law and order, safeguard human rights
and enable access to & delivery of justice.
It has four basic components:
• Law & Order and Internal Security
• Safeguard of basic rights
• Police Administration and Citizen‐friendliness of the Police
• Access to Justice and Judicial Accountability
3. Administrative Dimension of Governance
This dimension determines the ability of government to deliver basic services to citizens by
efficiently managing the human and financial resources. It also includes performance of the
State on vigilance and anti‐corruption matters as well as responsiveness and transparency
in administration.
It has following four components:
• Citizen Interface and Engagement
• Managing Human, Financial and other resources
• Basic Service Delivery

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• Corruption Perception, Vigilance & Enforcement

4. Economic Dimension of Governance
The economic dimension pertains to the ability of the state to ensure macro-economic
stability and create conducive climate for economic activity to take place across different
sectors of the economy. Economic Governance is also reflected in the state’s ability to
provide support to the primary sector.
It has three basic components:
• Fiscal Governance
• Business Environment
• Support to the Primary Sector
5. Social and Environmental Dimension of Governance
The social dimension pertains to the ability of the state to take care of the vulnerable
sections of the society. It also seeks to assess governance by examining the role and quality
of the civil society and media.
Environmental management as a separate component is also included due to its increasing
importance in governance.
This dimension has three key components:
• Welfare of the Poor and Vulnerable
• Role of Civil Society and Media
• Environmental Management
2.2. Governance Issues in India
India faces a range of various governance related issues in political, economic, administrative,
social and legal domain. Some factors attributable to poor governance are:
• Political Issues:
o Criminalization of Politics
o Misuse of political power
o Decentralization more in letter less in spirit
• Legal and Judicial issues
o Delayed justice, issue of under trials
o Lack of accountability in Judiciary
o Threat to life and personal security
• Administrative issues
o Lack of sensitivity, transparency and accountability in the working of State machinery
o Bureaucratic Delays
o Resistance to changes which promote transparency and accountability
o Corruption
• Economic issues
o Poor management of economy
o Persisting fiscal imbalances
o Regional disparities
• Social and Environmental issues
o Denial of basic services to a substantial proportion of the population
o Marginalisation and exclusion of people on account of social, religious, caste and
gender affiliation
o Existence of a significant number of voiceless poor with little opportunity for
participation in governance; and
o Deterioration of physical environment, particularly in urban areas.

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2.3. Good Governance Initiatives in India

India has to make big leaps to improve its governance records. Multiple steps have been taken
in this regard. For example, the two biggest initiatives which have been taken in India for
empowering common man and effective functioning of governance include Right to
Information Act and E-governance measures.
Good governance initiatives can be summarized as following:
• Decentralization and People’s Participation - 73rd and 74th Constitutional amendment Act
(Covered in Polity section)
• Developing programs for weaker sections and backward areas (Covered in Social Justice
section)
• Financial management and budget sanctity (Covered in Paper 3)
• Simplification of procedures and processes
• Citizen’s Charters
• Sevottam model
• Redress of Citizen’s Grievances
• E-Governance and use of ICT tools
• Public service morale & anti‐corruption measures
• Transparency and Accountability measures
▪ Right to Information (Covered in Paper 4)
▪ Social Audits
2.4. Minimum Government, Maximum Governance
• It means a citizen friendly and accountable administration.
• It is done by simplification of procedures, identification and repeal of obsolete/archaic
laws/rules, identification and shortening of various forms, leveraging technology to bring in
transparency in public interface and a robust public grievance redress system.
• This will greatly reduce time and effort on the part of the both citizen and government
officials in public offices.
• On these lines, Digital India has helped Ministry of Panchayati Raj move to 100% e-office.
• Ease of Doing Business’ also focuses on ease of governance. The emphasis has been on
simplification and rationalization of the existing rules and introduction of information
technology to make governance more efficient and effective.
• mygov@nic.inand india.gITov.info are two citizen centric platforms to empower people to
connect with the Government and contribute towards good governance.
• PMO website also seeks expert advice from the people, thoughts and ideas on various
topics that concern India.

3. Citizen Charter
3.1. What is Citizen Charter?
A Citizen Charter is a document that outlines the commitment of a public body towards
standard, quality and timeframe of service delivery along with grievance redress mechanism. It
is an expression of understanding between the citizen and service provider about the nature of
services that the latter is obliged to provide.
3.2. Origin and the concept of Citizen Charter
The concept was first articulated and implemented in the United Kingdom by the Conservative
Government of John Major in 1991 as a national programme. The basic objective of the
Citizen’s Charter is to empower the citizen in relation to public service delivery.

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The six principles of the Citizen’s Charter movement as originally framed were:
1. Quality: Improving the quality of services;
2. Choice: Wherever possible;
3. Standards: Specifying what to expect and how to act if standards are not met;
4. Value : For the taxpayers’ money;
5. Accountability: Individuals and Organisations; and
6. Transparency: Rules/Procedures/Schemes/Grievances.
The programme was re-launched in 1998 by the Labour Government of Tony Blair which
rechristened it “Services First”. It includes the nine principles of Service Delivery (1998), which
are as follows:-
1. Set standards of service;
2. Be open and provide full information;
3. Consult and involve;
4. Encourage access and the promotion of choice;
5. Treat all fairly;
6. Put things right when they go wrong;
7. Use resources effectively;
8. Innovate and improve;
9. Work with other providers.
3.3. Significance of Citizen Charter
• It makes a public institution transparent and accountable.
• It can be an effective tool to engage the civil society and to curb corruption.
• It aims at enhancing standards of service delivery.
• It makes government more responsive.
• It enhances people participation in governance process and the credibility of the
government.

3.4. Citizen Charter in India

Department of Administrative Reforms and Public Grievances (DARPG), in the Ministry of
Personnel, Public Grievances and Pensions, coordinates the efforts to formulate and
operationalize Citizens' Charters. It provides guidelines for formulation and implementation of
the Charters as well as their evaluation.
DARPG prescribes that a good Citizen’s Charter should have the following components:-
• Vision and Mission Statement of the Organisation
• Details of Business transacted by the Organisation
• Details of ‘Citizens’ or ‘Clients’
• Statement of services including standards, quality, time frame etc. provided to each Citizen/
Client group separately and how/ where to get the services
• Details of Grievance Redress Mechanism and how to access it
• Expectations from the ‘Citizens’ or ‘Clients’
• Additional commitments such as compensation in the event of failure of service delivery.
Who is a ‘Citizen’ with reference to Citizen’s Charter?
The term ‘Citizen’ in the Citizen’s Charter implies the clients or customers whose interests and
values are addressed by the Citizen’s Charter and, therefore, includes not only the citizens but
also all the stakeholders, i.e., citizens, customers, clients, users, beneficiaries, other Ministries/
Departments/ Organisations, State Governments, UT Administrations etc.

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3.5. Issues with Citizen Charters in India:

• Absence of legal backing to charters. The Citizen’s Charter is not legally enforceable and,
therefore, is non-justiciable.
• Poor design and content: Critical information that end users need to hold agencies
accountable are missing in charters.
• Lack of consultation: End-users and NGOs are not consulted when Charters are drafted.
• Inadequate groundwork: Non-familiarity of the service providers with the philosophy, goals
and main features of charters.
• Lack of public awareness: Effective efforts of communicating and educating the public
about the standards of delivery have not been undertaken.
• Resistance to change: Vested interests work for stalling the Citizens’ Charter altogether or
in making it toothless.
• Lack of review: The review and updation exercise of charters have been very poor.
• The needs of senior citizens and other special categories including differently abled has
largely not been factored in charter exercise.
• Charters haven not been prepared in vernaculars.
• Details of public grievance officer are not provided in many charters.
3.6. Recommendations of 2nd ARC report
To address the above issues and to make these Charters effective tools of accountability in
public service, the 2nd ARC has given following recommendations:
• One size does not fit all
• Citizen’s Charter should be prepared for each independent unit under the overall umbrella
of the organization’s charter
• Wider consultation which should include civil society in the process
• Firm commitments to be made
• Internal process and structure should be reformed to meet the commitments given in the
Charter
• Redress mechanism in case of default
• Periodic evaluation of Citizen’s Charters
• Benchmark using end-user feedback
• Hold officers accountable for the results

4. Sevottam Model
4.1. What is Sevottam Model?
The Sevottam model has been developed with the
overarching objective of improving the quality of
public service delivery in the country. It is a
combination of two words Seva (service), Uttam
(excellence).
It provides a framework for organizations to asses
and improve the quality of service delivery to
citizens. The model was suggested by 2nd ARC in
its 12th report Citizen centric administration.
The model has three modules:
1. Citizen Charter

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2. Public Grievance Redress mechanism

3. Service Delivery Capability
The model prescribes seven steps:
1. Define services and identify clients.
2. Set standards and norms for each service.
3. Develop capability to meet the set standards.
4. Perform to achieve the standards.
5. Monitor performance against the set standards.
6. Evaluate impact through an independent mechanism.
7. Continuous improvement based on monitoring and evaluation.
Organizations adopting Sevottam model for service delivery need to comply with seven steps
and ensure formulation of three modules.
Implementation of Sevottam framework in the government departments was started in 2009.
Later, Sevottam has been launched as a certification scheme which provides for the award of
the Sevottam symbol of excellence to public service organizations that implement and are able
to show compliance to a set of management system requirements that have been specified in a
specially created standard document. This standard, known as IS 15700:2005, was developed
by the Bureau of Indian Standards (BIS) based on the objectives of Sevottam.
4.2. Significance of the model
• It is a Quality Management framework applicable to the activities of public service delivery
organizations at the point of interface with service recipients.
• The framework is a tool in the hands of implementing organizations.
• It guides them through systematic initiatives for sustainable improvements in service
delivery
• The framework enables implementing organizations to undertake a systematic, credible and
authenticated self-assessment (or ‘gap analysis’) for citizen-centric service delivery.
• Using this analysis, practical solutions are gradually and systematically incorporated into the
organization’s day-to-day routine thereby ensuring sustainable results.
4.3. Time Bound Delivery of Services
To ensure Right of Citizens for Time Bound Delivery of Goods and Services, “the Right of Citizens
for Time-bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011”, was
introduced in the LokSabha in 2011, but it lapsed with the term of the last House.
The need of the hour is to identify delivery of services as a matter of right and bring legal
provision for time bound delivery of services.
Highlights of “the Right of Citizens for Time-bound Delivery of Goods and Services and
Redressal of their Grievances Bill, 2011”:
• Every public authority was required to publish a Citizens Charter within six months of the
commencement of the Act.
• A citizen may file a complaint regarding any grievance related to:
a) citizens charter;
b) functioning of a public authority; or
c) violation of a law, policy or scheme.
• The Bill required all public authorities to appoint officers to redress grievances.
• Grievances were to be redressed within 30 working days.

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• The Bill also provided for the appointment of Central and State Public Grievance Redressal
Commissions.
• A penalty of up to Rs 50,000 to be levied upon the responsible officer or the Grievance
Redressal Officer for failure to render services.
Some states have brought legislation to guarantee the right to public services delivery, but a
Central law is required to provide an overarching framework across the country.

5. Social Audit
5.1. What is Social Audit?
Social audit is a process in which details of resources used by public agency for
development initiatives are shared with people often through public platforms, which
allows end users to scrutinize the impact of developmental programs.
Social audit serves as an instrument for the measurement of social accountability of an
organization. It gained significance after the 73rd amendment of the constitution relating
to Panchayat Raj institutions.
Difference with other audits

A conventional financial audit focuses on financial records and their scrutiny by an external
auditor following financial accountancy principles. Social audit covers a wide horizon of
stakeholders as its reports revolve around ethics, labor, environment, human rights, community,
society and statutory compliances.
5.2. Need of Social Audit
The investment of large amount of funds and resources by the Government of India and various
national and international agencies, since independence in social development programmes,
has not been justified by the impact it has made.
The major focus by the Government hitherto has been in the supply side of the Programme
Delivery System. While improvement of the SUPPLY SIDE is a long term process strengthening
the DEMAND SIDE, may be a short run process, which will improve the effectiveness of the total
delivery system much faster.
There is a need to strengthen the DEMAND SIDE on a priority basis through:
a) Creating a culture of Social Audits of Development Programmes, and
b) Strengthening the Gram Sabhas, the closest institution to the Beneficiaries.
5.3. Principles of Social Audit
Eight specific key principles have been identified from Social Auditing practices around the
world:

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1. Multi-Perspective/Polyvocal: Reflect the views of all the stakeholders.

2. Comprehensive: Report on all aspects of the organisation's work and performance.
3. Participatory: Encourage participation of stakeholders and sharing of their values.
4. Multidirectional: Stakeholders share and give feedback on multiple aspects.
5. Regular: Produce social accounts on a regular basis so that the concept and the practice
become embedded in the culture of the organisation covering all the activities.
6. Comparative: Provide a means whereby the organisation can compare its performance
against benchmarks and other organisations’ performance.

7. Verified: Social accounts are audited by a suitably experienced person or agency with no
vested interest in the organisation.
8. Disclosed: Audited accounts are disclosed to stakeholders and the wider community in the
interests of accountability and transparency.
These are the pillars of Social Audit, where socio-cultural, administrative, legal and democratic
settings form the foundation for operationalising Social Audit.
5.4. Significance of Social Audit
The significance of social audit for social sector programmes can be understood from the
following points:
• Enhances reputation: Social Auditing helps the legislature and executive in identifying the
problem areas and provides an opportunity to take a proactive stance and create solutions.
• Alerts policymakers to stakeholder trends: Social Auditing is a tool that helps managers
understand and anticipate stakeholder’s concerns.
• Affects positive organisational change: Social Auditing identifies specific organisational
improvement goals and highlights progress on their implementation and completeness.
• Increases accountability: There is a strong emphasis on openness and accountability for
government departments. Social Auditing uses external verification to validate that the
Social Audit is inclusive and complete. This leads to reduction in wastages and corruption.
• Assists in re-orienting and re-focusing priorities: Social Auditing could be a useful tool to
help departments reshape their priorities in tune with people's expectations.
• Provides increased confidence in social areas: Social Audit can enable departments/
institutions to act with greater confidence in social areas that have been neglected in the
past or have been given a lower priority.

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In recent years due to the steady shift in devolution of funds and functions to the local
government, the demand for social audit has grown. In flagship schemes such as MGNREGA,
the Union Government is promoting social audit to check corruption.
Similarly, various state governments such as Rajasthan and Andhra Pradesh have taken the
initiative to incorporate social audit as part of their monitoring systems through Gram Sabhas
and in partnership with a consortium of NGOs.

5.5. Limitations of Social Audit

• The scope of social audits is highly localised and covers only certain selected aspects.
• Social audits are often sporadic and ad hoc.
• Monitoring is informal and unprocessed.
• The findings of social audit cannot be generalised over the entire population.
• Individual programs present their own unique challenges. For example literacy program for
adults require data on migration.
• Several problems require a package of programme to be implemented simultaneously. For
example, rural health requires convergence between water supply, education, sanitation,
nutrition etc. Social audit may therefore need a more holistic approach.
• Absence of trained auditors.
• Lack of action on audit reports and findings.
5.6. Way Forward
• For empowerment of the Demand System, investment in education and awareness of
Public/ Gram Sabha members is required.
• Institutional capacity need be increased at PRI, Block, and DRDA level, in terms of
information Storage and distribution mechanism
• Support may be provided to committed and competent NGOs to play the catalytic role
including conducting Social Audit.
• Media need be more Rural and Development focussed
• Recognise and Reward the members who have contributed to the process of strengthening
Demand System and improved service delivery
• Develop an INSTITUTIONAL FRAMEWORK for, organising PRI Accounting Audit and Social
Audits and putting them on the INTERNET
• Promoting proactive disclosure of information to facilitate social audits.

6. E-Governance
6.1. What is E-governance?
According to the World Bank, “E-Governance refers to the use by government agencies of
information technologies (such as Wide Area Networks, the Internet, and mobile computing)
that have the ability to transform relations with citizens, businesses, and other arms of
government. These technologies can serve a variety of different ends:
• better delivery of government services to citizens
• improved interactions with business and industry
• citizen empowerment through access to information
• or more efficient government management
The resulting benefits can be less corruption, increased transparency, greater convenience,
revenue growth, and/or cost reductions.”
According to UNESCO, “e-Governance may be understood as the performance of governance

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via the electronic medium in order to facilitate an efficient, speedy and transparent process of
disseminating information to the public, and other agencies, and for performing government
administration activities.”
6.2. Potential of e-governance
• Fast, Convenient and Cost Effective Service Delivery: With the advent of e-Service delivery,
the government can provide information and services at lesser costs, in reduced time and
with greater convenience.
• Transparency, Accountability and Reduced Corruption: Dissemination of information
through ICT increases transparency, ensures accountability and prevents corruption. An
increased use of computers and web based services improves the awareness levels of
citizens about their rights and powers. It helps to reduce the discretionary powers of
government officials and curtail corruption.
• Expanded Reach of Governance: Expansion of telephone network, rapid strides in mobile
telephony, spread of internet and strengthening of other communications infrastructure
would facilitate delivery of number of public services.
• Empowering people through information: Increased accessibility to information has
empowered the citizens and has enhanced their participation. With easy access to the
government services, the faith of the citizens in the government increases and they come
forward to share their views and feedback.
• Improve interface with Business and Industry: Industrial development in India has been
hampered in the past with complex procedures and bureaucratic delays. E-governance aims
to expedite the various processes important for industrial development.
6.3. Models of e-governance
E-Governance services can be shared between citizens, businessman, government and
employees. These four models of e-governance are:- Government to citizen (G2C), Government
to government (G2G), Government to businessmen (G2B) and Government to employees (G2E).
6.3.1. Government to Citizen (G2C)
This model of e-governance refers to the government services which are shared by the citizen.
This model strengthens the bond between government and the citizen. Type of services which
are provided by this model:
• Payment of online bills such as electricity, water, telephone bills etc.
• Online registration of applications
• Online copies of land-record
• Online filling of complaints
• Availability of any kind of online information
6.3.2. Government to Government (G2G)
This model refers to the services which are shared between the governments. There is lots of
information that need to be shared between various government agencies, department and
organizations. These types of services or information are:
• Government document exchange which includes preparation, approval, distribution, and
storage of all governmental documents is also done through e-governance.
• Most of the finance and budget work are also done through e-governance.
6.3.3. Government to Businessmen (G2B)
Through this model, bond between private sector and government strengthens. They share
information through this model like:

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• Collection of taxes
• Rejection and approval of patent
• Payment of all kind of bills and penalty
• Sharing of all kind of information, rules and data
• Complaints or any kind of dissatisfaction can be expressed
6.3.4. Government to Employees (G2E)
This model increases the transparency between government and its employees and thus
strengthens their relationship. Information that can be shared by this model:
• All kind of data submission(attendance record, employee record etc.) from various
government offices
• Employee can file complaints and dissatisfaction
• Rules & regulation and information for employees can be shared
• Employees can check their payment and working record
6.4. E-Governance Initiatives in India
The Government of India is implementing the ‘Digital India’ programme with the vision to
transform India into a digitally empowered society and knowledge economy. Digital India is an
umbrella programme that covers multiple Government Ministries and Departments and is
being coordinated by MeitY (the Ministry of Electronics and Information Technology).
Various e-Governance initiatives taken by Government under Digital India programme are as
follows:
• Under the National e-Governance Action Plan (NeGP) which is now subsumed under
Digital India, core infrastructure components are being implemented such as
o State Data Centres (SDCs),
o State Wide Area Networks (SWANs),
o Common Services Centres (CSCs),
o State e-Governance Service Delivery Gateway (SSDGs),
o e-District and Capacity Building
• e-Kranti (Electronic delivery of services): The focus of the e-Kranti is to transform the e-
Governance services by expanding the
o portfolio of Mission Mode Projects (MMPs) in e-Governance under various Government
Departments,
o undertaking Government Process Reengineering (GPR),
o work flow automation,
o introducing latest technologies such as Cloud and mobile platform and
o focus on integration of services.
Following are some of the successful e-governance initiatives which are being implemented in
India.
6.4.1. Government to Citizen (G2C) Initiatives:
• Computerisation of Land Records (Department of Land Resources): A pilot project on
computerization of Land Records, which was 100% centrally-sponsored started in1994-95
onwards.
• Bhoomi Project in Karnataka (Online Delivery of Land Records): Bhoomi is a self-
sustainable e-Governance project for the computerized delivery of 20 million rural land
records to 6.7 million farmers.
• Gyandoot (Madhya Pradesh): It is an Intranet-based service delivery with the twin
objective of providing relevant information to the rural population and acting as an

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interface between the district administration and the people. The services offered through
the Gyandoot network include: daily agricultural commodity rates (mandibhav), income
certificate, public grievance redressal, BPL family list etc.
• Lokvani Project in Uttar Pradesh: Its objective is to provide a single window, self-
sustainable-Governance solution with regard to handling of grievances, land record
maintenance and providing a mixture of essential services.
• Project FRIENDS in Kerala: FRIENDS (Fast, Reliable, Instant, Efficient Network for the
Disbursement of Services) is a Single Window Facility providing citizens the means to pay
taxes and other financial dues to the State Government.
• MyGov: It aims to establish a link between Government and Citizens towards meeting the
goal of good governance. MyGov encourages citizens as well as people abroad to
participate in various activities i.e. 'Do', 'Discuss', 'Poll', 'Talk', ‘Blog’, etc.
• Digital Locker System: It serves as a platform to enable citizens to securely store and share
their documents with service providers who can directly access them electronically.
6.4.2. Government to Business (G2B) Initiatives
• e-Procurement Project in Andhra Pradesh and Gujarat: To reduce the time and cost of
doing business, to realize better value for money spent through increased competition and
to standardize procurement processes across government departments, this project was
started.
• SWIFT initiative: As a part of the “Ease of Doing Business” initiatives, the Central Board of
Excise & Customs, has taken up implementation of the Single Window Project to facilitate
the Trading Across Borders in India. The Single Window Interface for Trade (SWIFT), would
reduce interface with Governmental agencies, dwell time and the cost of doing business.
6.4.3. Government to Government (G2G) Initiatives
• Khajane Project in Karnataka: The project has resulted in the computerization of the entire
treasury related activities of the State Government and the system has the ability to track
every activity right from the approval of the State budget to the point of rendering accounts
to the government.
6.5. Challenges
There are a large number of obstacles in implementation of e-Governance in India. These can
be categorized under the following:
6.5.1. Environmental and Social Challenges
• Non local Language: e-Governance applications are written in English language which may
not be understandable to many of the people.
• Low IT Literacy: Literacy level of India is very low and even among literate, most of the
people in India are not aware about the usage of Information Technology.
• User friendliness of government websites: Users of e-Governance applications are often
non-expert users who may not be able to use the applications in a right manner.
• Digital divide: It is the separation that exists between the individuals, communities and
businesses that have access to Information Technology and those that do not have such
access. People who are living below poverty line cannot afford a computer and internet
connection for themselves to take the benefits of the e Government and other on-line
services. Digital divide may also be caused by the lack of awareness among the people.
• Resistance to Change: The struggle to change phenomenon can explain much of the
hesitation that occurs on the part of the constituents in moving from a paper-based to a
web-based system to interact with government.

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6.5.2. Economic Challenges

• Cost: In developing countries like India, cost is one of the most important obstacles in the
path of implementation of e-governance projects. A huge amount of money is involved in
implementation, operational and evolutionary maintenance tasks.
• Applications must be transferrable from one platform to another: e-governance
applications must be independent from hardware or software platforms.
• Maintenance of electronic devices: As the Information Technology changes very fast and it
is very difficult for us to update our existing systems very fast. Maintenance is a key factor
for long living systems in a rapidly changing technical environment.
6.5.3. Technical challenges
• Interoperability: Interoperability is the ability of systems and organizations of different
qualities to work together. The e-Governance applications must have this characteristic so
that the newly developed and existing applications can be implemented together.
• Multimodal Interaction: Multimodal interaction provides the user with multiple modes of
interfacing with a system. An e-Government application can be really effective if its users
can access it using different devices.
• Privacy and Security: A critical obstacle in implementing e-Governance is the privacy and
security of an individual’s personal data that he/she provides to obtain government
services.
• Connectivity to backward areas: A very large part of India is far away from the basic
necessities of life. The connectivity of e-governance to these areas will be challenging task
for the government.
• Local language: The e-governance applications must be written in local language of the
people so that they may be able to use and take advantage of these applications.
• Lack of human resources: India is working hard towards creating better technicians day by
day. But still, there is lack of matured technicians in the country to look after e-governance
projects.
6.6. Recommendations of 2nd ARC on e-governance
Following are some of the important recommendations of 2nd Administrative Commission on
e-governance:
Building a Congenial Environment: Building a congenial environment is a sine-qua-non for
successful implementation of e-Governance initiatives. This should be achieved by:
• Creating and displaying a will to change within the government
• Providing political support at the highest level
• Incentivising e-Governance
• Creating awareness in the public with a view to generating a demand for change.
Business Process Re-engineering: Governmental forms, processes and structures should be re-
designed to make them adaptable to e-Governance, backed by procedural, institutional and
legal changes.
Capacity Building and Creating Awareness: Capacity building efforts must attend to both the
organizational capacity building as also the professional and skills up gradation of individuals
associated with the implementation of e-Governance projects.
Developing Technological Solutions: Develop a national e-Governance ‘enterprise architecture’
framework as has been done in some countries.

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Monitoring and Evaluation: Monitoring of e-Governance projects should be done by the

implementing organization during implementation. It should be done in the manner in which
project monitoring is done for large infrastructure projects.
Public-Private Partnership (PPP): Several components of e-Governance projects lend
themselves to the Public-Private Partnership (PPP) mode. In all such cases (PPP) should be the
preferred mode. The private partner should be selected through a transparent process. The
roles and responsibilities of government as well as the private partner should be clearly laid
down in the initial stage itself, leaving no room for any ambiguity.
Protecting Critical Information Infrastructure Assets: There is need to develop a critical
information infrastructure assets protection strategy. This should be supplemented with
improved analysis and warning capabilities as well as improved information sharing on threats
and vulnerabilities.
The Common Support Infrastructure: The State Data Centres (SDCs) should be maintained by
Government agencies such as NIC as it involves handling of sovereign data. Further, all data
centres at the State level should be subsumed in the SDCs.
Mission Mode Project on Computerisation of Land Records: Surveys and measurements need
to be carried out in a mission mode utilizing modern technology to arrive at a correct picture of
land holdings, land parcels and rectification of outdated maps. This needs to be accompanied
by an analysis of the existing mechanism for updating land records – which varies from State to
State – to be supplanted by an improved and strengthened mechanism which ensures that all
future transactions in titles are immediately reflected in the land records.
Legal Framework for e-Governance: A clear road map with a set of milestones should be
outlined by Government of India with the ultimate objective of transforming the citizen-
government interaction at all levels to the e-Governance mode by 2020.
Knowledge Management: Union and State Governments should take proactive measures for
establishing Knowledge Management systems as a pivotal step for administrative reforms in
general and e-Governance in particular.
6.7. Ease of Governance
• The idea of ease of governance was mooted very recently by the Minister of Personnel,
Public Grievances and pensions.
• As per this idea, the main aim of e-governance should be ‘ease of governance’ leading to
‘ease of living’ of people. This is essential for the emergence of a ‘New India’.
• Ease of Governance essentially means Ease of access to governance where public policies
are people centric with empathetic and responsive government mechanism with ear on the
ground and connects far more effectively.
• One example of such governance is swift move by the Ministry of aviation to ask airline
operators to do away with high cancellation fee on flight booking. Cancellation fee up to Rs.
3000 were quite high and even sometimes, more than actual cost of the ticket.

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7. Vision IAS GS Mains Test Series Questions

1. “The citizens, who are at the receiving end, are the best judge of the quality and
quantity of services administered for their benefit. But they have hardly any means to
hold the administration accountable.” Examine.
Approach:
• Public Service Delivery as a part of governance
• Importance of accountability factor in delivery of public services.
• Reforms thereon
Answer:
From the perspective of service delivery, governance can be understood as the set of
incentives, accountability arrangements, and rules that affect the way key actors
including policy makers and provider organizations and their managers and staff are
held accountable for their behaviors and ability to deliver high-quality services with
efficiency and responsiveness.
In many low and middle income countries, dismal failures in the quality of public
service delivery are demonstrated by leakages of public funds, non delivery of goods
intended for social assistance benefits. These failures have driven the agenda for better
governance and accountability. Governments, civil society, and donors have become
increasingly interested in the idea that citizens can contribute to improved quality of
service delivery by holding policy makers and providers of services accountable.
This idea of holding accountability has been shaped by the influential 2004 World
Development Report: Making Services Work for Poor People .The WDR defined a
framework for analyzing accountability relationships among policy makers, providers,
and citizens. Within this framework, accountability can be implemented through either
a “long route,” whereby citizens influence policy makers who in turn influence service
delivery through providers, or a “short route,” through which citizens individually and
collectively can directly influence, participate in, and supervise service delivery by
providers.

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Keeping the two methods in mind following measures have been introduced for holding
accountability of actors:
• Grievance Redress Mechanisms: Grievance redress mechanisms (GRMs) provide
people with opportunities to use information to influence service delivery.
• Single Window System for Delivery of Services to avoid delays in delivery
• Public Service Delivery Guarantee Acts: in various states like Madhya Pradesh
Bihar, J&K, Delhi, Rajasthan, Uttar Pradesh (to be referred as Right to Public
Services Acts, RTPS Act) that guarantee time-bound delivery of selected services to
the citizen. The Acts are significant as they place the onus of delivery on the service
provider with penalties for delays in service provision.
These initiatives can go a long way in improving the quality of public services and fixing
the accountability at individual level.

2. Discuss what constitutes good governance in the context of India. Also mention some
aspects of social justice and discuss how good governance can act as a facilitator
towards securing justice.
Approach:
• First discuss what good governance means. Try to explain the concept holistically.
Then taking India as a point of departure, discuss what good governance means in
the specific context of India. While doing so, keep in mind the main challenges that
we face as a nation and scrutinize whether good governance should be one that
help us deal with those challenges as a nation.
• Next, explain the concept of social justice. Keep the difference between western
and Indian notions of social justice in mind and bring out clearly how these differ.
• Finally, explain how various aspects of social justice would be relevant only if they
can be secured. Here discuss how good governance can act as a facilitator towards
securing justice and how securing justice is itself an important aspect of good
governance.
Answer:
• Jawaharlal Nehru, in his famous ‘tryst with destiny’ speech had articulated our
main challenges as ‘the ending of poverty, ignorance, disease and inequality of
opportunities’. India’s democratic experience of the past six decades has also
clearly established that our central challenges still relate to social opportunities and
mass poverty.
• Good governance, as a concept, is much larger than mere administrative reforms as
understood in the conventional sense of the term, to the extent that it covers much
more ground and substance. It relates to ethical grounding of governance and must
be evaluated with reference to specific norms and objectives of a particular society.
• Moreover, the concept of good governance is applicable to all sections of society
such as the government, legislature, judiciary, the media, the private sector, the
corporate sector, the co-operatives, societies registered under the Societies
Registration Act, duly registered trusts, organizations such as the trade unions and
lastly the non government organizations (NGOs).
• In the context of India, good governance can be defined as that system of
governance, which helps in securing justice, leads to empowerment of people,
provides employment and ensures efficient delivery of pubic services. These
aspects are relevant to the extent that they help us deal with our central challenges

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effectively. Thus, first and foremost, good governance must aim at expansion of
social opportunities and removal of poverty.
• The concept of social justice, on the other hand, is mostly interpreted as “poverty
alleviation for the working poor”, in both formal and informal sectors, the
employed and underemployed.
• However, in the specific context of India, ensuring social justice means not only to
address poverty, distribution of material goods and social exclusion, as it is in
western societies, but also to remove social discrimination of the ex-untouchables.
• But these aspects of social justice will hold relevance only if they can be secured
and accessed as well as ensured through rule of law.
• It is in this context that good governance becomes important. Securing justice is in
fact, an important aspect of good governance, not only in India, but throughout the
world. For instance, it is only through good governance that security of life and
property, an important public good, can be ensured. Securing justice is based upon
the basic principle that people should be able to rely upon the correct application
of law. It is only through good governance that such access to justice can be
ensured. Moreover, rule of law, which is another important aspect of securing
justice, is related to good governance. This is because it is only good governance
that can ensure that no one is above the law.
• Thus good governance and social justice not only strive towards the same goals, but
securing justice is also an important facet of good governance.

3. Digital India programme has the potential to not only transform the citizen service
delivery, but also provide the much needed impetus for key social and industrial
sectors. Examine.
Approach:
• The question should be structured to spell the aims and objectives of digital India
Programme, highlighting in the process its potential impact on Citizen Service
delivery, Social Sector and Industrial Sector.
• Answer should comprise three parts:
o Aims and objectives of Digital India Programme
o Its potential or intended impact on Citizens service delivery, Key Social and
Industrial Sectors
o Limitations and challenges should be highlighted, especially keeping in mind
the experience of previous government initiatives in this area.
• Conclude by mentioning the provisions that address those challenges.
Answer:
The Digital India programme, aims to promote e-governance and transform India into a
digitally empowered society and knowledge economy. This programme has been
envisaged by Department of Electronics and Information Technology (DeitY) and will
impact ministry of communications & IT, ministry of rural development, ministry of
human resource development, ministry of health and others.
It emphasises thrust to nine pillars of growth areas. If the vision behind the programme
comes to fruition it can bring transformative changes in a wide range of areas such as.
Transformation in Citizens Service Delivery: Digital India aims to ensure that
Government services are available to citizens electronically. It would also bring in
public accountability through mandated delivery of government’s services

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electronically; a Unique ID and e-Pramaan based on authentic and standard based

inter-operable and integrated government applications and data basis. Digital
empowerment of citizens will pay emphasis on universal digital literacy and availability
of digital resources/services in Indian languages.
Transformation of Key Social Sectors:
Through the application of technology the Digital India programme has the potential to
bring transformation in areas such as education- distance education, tele-education, e-
literacy. Similarly, in the health sector it would promote tele-medicine, use of ICT in
health service delivery, awareness as well as grievance redressal. With its thrust on
rural and agriculture sectors the programme can have transformative effects in these
areas as well. Besides these the programme is expected to create 17 million direct and
85 million indirect jobs.
Transformation of Key Industrial Sectors:
With a planned expenditure in tune of Rs 1 lakh crore the digital India programme can
also prove to be a catalyst in promoting industrial growth through both backward and
forward linkages. IT/ITeS, telecom, electronics manufacturing sectors would be benefit
from Digital India. Apart from these experts believe the programme would also have
positive impact on other industry sectors such as Power Sector and Banking and
Financial Services.
However, learning from the past initiatives, the obstacles of rural urban digital divide,
last mile connectivity, and capacity building both in terms of infrastructure and human
resources, and huge investment requirements has to be surmounted. The Digital India
programme envisages creating synergy and linkages between various existing
programmes and initiatives. In this direction involvement of private sector through PPPs
as well as clear delineation of specifics would go a long way in achieving the stated
objectives.

4. Why is redressal of public grievances important for a democracy? Critically evaluate the
functioning of various instruments for redressal of public grievances in India.
Approach:
• Introduce by explaining the concept of Grievance
• Write its importance in democracy
• Write steps taken to resolve the grievance and assessment of these
• Whats more need to be done
Answer:
Grievance as an expression of dissatisfaction made to an organization related to its
products, services and/or process, where a response or resolution is explicitly or
implicitly expected. The basic principle behind this is that if the promised level of
service delivery is not achieved or if the right of a citizen is not honored, then the
citizen should be able to take recourse to a mechanism to have his grievance redressed.
Why to have Grievance redressal
• The poor record of most public agencies in the areas of prompt and effective
redressal of public grievances is a major cause of public dissatisfaction and since
the Government being a service provider, it is bound to meet people’s needs and
aspirations.

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• Effective and timely redressal of public grievances is a hallmark of responsive and

responsible governance
• Accessible and effective grievance mechanism are necessary component of
accountability
• There cannot be any fruitful enjoyment of services unless facility is provided for
providing remedies in case of violation of those rights conferred to citizend. In the
absence of the remedial system the rights become infructuous.
Measures being taken to redress grievance:
• The Central Government, State Governments as well as various organizations under
them have set up grievance redressal mechanisms to look into the complaints of
citizens, example being of online portals like CPGRAMS at central level, Sugam in
Rajasthan etc.
• Besides, there are other institutional mechanisms like the CVC, and the Lokayuktas
which have the mandate to look into the complaints of corruption and abuse of
office by public servants.
• Many organizations, for example, the Reserve Bank of India, have set up
Ombudsman to look into grievances.
• Institutions such the National and State Human Rights Commissions, National and
State Women’s Commissions, the National Commission for Scheduled Castes, and
the National Commission for Scheduled Tribes also look into the complaints from
the public in their prescribed areas.
But there has been many problem associated with these measures. In general the
problems are: lack of awareness to people and official as well about these mechanism,
no proper monitoring of grievance redressal mechanism, public grievance cells often
suffer from shortage of staff and resources, long delay in disposal of grievance etc.
Way Forward
• Wide publicity of these mechanism through national, regional and local media as
well as through electronic media.
• Grievance-handling system should be accessible, simple, quick, fair, responsive and
effective.
• Behavioural reform: There is a need to bring about a total change in the
attitude/behaviour of public servants or in other words, the mindset towards
redressal of public grievances at all levels and to pinpoint responsibility for action
against grievances of the people.
• The laws and regulations militating against the interest of the weaker sections of
the society and the poor are required to be urgently amended.

5. Despite increasing awareness of beneficiaries, social audits have not played a

significant role in reducing malpractices and detecting irregularities. Discuss. How
can social audits be made more effective?
Approach:
• Firstly, write a brief introduction about social audits, its benefits in improving the
delivery of services. Further linking it with possible benefits, focus on the role of
community participation and compare it with traditional approach to audit.
• Secondly, provide drawbacks focusing on socio-institutional issues and provide
suggestions addressing these loopholes

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Answer:
Social Audit refers to the social control over withdrawal and usage of funds drawn from
the state exchequer for programs and policies aimed at the benefit of people. It allows
people to enforce transparency and accountability, thereby providing the ultimate users
an opportunity to scrutinize the development initiatives.
Benefits of Social Audit
• Social Audit facilitates transformation of citizens from a passive recipient to a
demanding client, thus making the Government answerable.
• They help raise awareness about entitlements.
• These Audits allow beneficiaries of different schemes to lodge complaints regarding
malpractices.
• Involvement of people in developmental activities ensures that money is spent
where it is actually needed.
• Unlike the traditional forms of audit, social audit is a continuous process.
• Helps in reduction of wastages & corruption.
• Promotes integrity and a sense of community partnership among people &
improves the standard of governance.
The loopholes in the implementation of Social Audits can be best understood through
the example of MGNREGA where it has been implemented across states.
• Very few states have actually instituted social auditing mechanism despite
mandatory provisions in acts like MGNREGA.
• The involvement of local representatives in malpractices has sometimes resulted in
resistance to social audits.
• The audits are yet to result in effective redressal. While a modest decline in
administrative complaints related to the non-provision of work was observed, there
was an increase in complaints of missing records on material expenditures.
• The impact of audits on other programme outcomes — employment generation,
targeting of the SC/ST population — is often absent.
• The follow-up and enforcement of punishments are weak. Also, there is absence of
establishment of vigilance cells in most of the cases.
• Relative lack of expertise among local bodies and social dynamics sometimes make
it naming and shaming exercise.
Suggestions
• Ensure institutionalisation of social audits across all states making it enforceable
and credible “contract” allocating responsibilities, defining timelines and ensuring
prompt penalty to the guilty.
• Capacity building to facilitate beneficiary-led-audits keeping in mind local
circumstances and empowering local participation.
• Adequate institutional support and adequate budgetary provisions to ensure the
viability of Social Audits.
Learning lessons and adopting measures to address all programme outcomes i.e.
ensure impact of social audits in future course correction.

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6. The reasons for failure of e-Governance projects are anything but technological. Discuss
in the context of India.
Approach:
• Cover e-Governance in its various dimensions
• Reasons for lack of success should cover these dimensions. Give examples
wherever possible.
Answer:
Citizens contact government for various reasons such as trying to influence public
policy, to addressing personal concerns that they have, conducting government
transactions, and finding information on benefits and services that government offers.
e-Governance is one such channel of public service delivery. E-governance is much
more than a technological initiative but is made of a complex set of relationships
between the stakeholder’s commitment, structured developmental processes and
adequate infrastructural resources.
Reasons for e-governance projects falling short of expectations:
• E-governance is seen more as computerisation, office automation and inventory
management rather than as a means of good-governance.
• E-gov was supposed to transform citizens from passive to active participants in
governance. While there are successful incidents such as citizen feedback on net-
neutrality being incorporated in final policy, such examples are few.
• Citizens do not associate much value addition to the e-gov projects. For example in
departments which maintain land records, especially in rural areas, the details
regarding land ownership, cropping patterns etc. were computerized but no legal
sanctity was given to the output generated by such systems in absence of a
commensurate change in the statutes.
• Lack of horizontal integration means that e-governance projects continue to
deliver services in a fragmented and unsatisfactory fashion resulting in the end
users having to approach a multitude of government agencies, thus defeating the
promise of ‘less government'.
• Lack of attention to issues relating to the confidentiality of data such as personal
details of citizens in some cases.
• Digital Divide: There is always the risk of the implementation of e-governance
projects being so prioritized as to benefit only a certain section(s) of the society.
Successful e-governance implementation is about four main components: Identification
of needs of end-users, Business Process Modification, use of IT, and Government intent.
Deficiencies in any of these would result in e governance projects failing to achieve
their objectives.
According to ARC, achieving the desired results would require full political backing, a
determined and resolute approach by all organizations and departments of
Government as well as active and constructive participation by the public. It would
require providing institutional and physical infrastructure for taking e-Governance
initiatives across our cultural and regional diversities and the creation of an
environment that would encourage the adoption of ICT. Thus, apart from the technical
requirement, success of e-Governance initiatives would depend on capacity building
and creating awareness within government and outside it.

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7. Though digital tools can help achieve transparency, efficiency and accountability in
governance, meeting these objectives requires much more than just building a large
digital infrastructure and mere connectivity. Discuss.
Approach:
• Explain the idea behind digital tools and e-governance.
• Give some examples of such initiatives.
• Elaborate upon what else the government needs to do to make digital tools
effective.
Answer:
Digital tools are aimed at reforming the functioning of the government. The
advantages they bring with them are transparency, efficiency and accountability in
governance, making the government citizen-friendly.
It makes use of platforms and services such as Aadhaar, payment gateways, Mobile
Seva platform, databases, IT infrastructure and more. E-Kranti and National e-
Governance Program are aimed at usher in an era of e-governance.
Putting these tools in place requires ICT infrastructure and connectivity in the form of
internet. But, implementation of such projects, globally, is witness to the fact that
these alone are not enough.
For these tools to be effective, the following steps are need too:
Improving work culture in government offices
• A strong will and political commitment to the vision of e-governance is needed
from within the government to utilise these tool effectively
• The government staffs needs to imbibe the values of transparency, accountability
and efficiency. Then digital tools can be efficiently used to usher good governance.
• Training and capacity building on the use of these tools in terms of necessary skills
and knowledge to conceptualise, initiate, implement and sustain these initiatives.
• Digital tools need to be encouraged in local governments as they are closest to
citizens
• The IT Act 2002 need to be suitably amended so as to encourage use of digital tools
– emails, SMS for speedy communication among offices and with public.
• The public offices should make proactive disclosure of information as mandated in
RTI act using digital tools like websites so as to usher transparency.
• Adoption of quality as a mission in government offices, as was done in Japan
• Demonstrating potential benefits in strengthening processes to enhance citizen
satisfaction and thus overcoming resistance to change from various quarters
• Developing performance measures that demonstrate how these tools help achieve
transparency, efficiency and accountability.
Empowering citizens
• Digital Divide needs to be bridged by ensuring that every citizen is e-literate.
• Local Language: Creation of contents, kiosks in the local language will help wider
participation of people, especially in rural areas.
• Awareness: Raising awareness among public through media, NGOs and
demonstrations about digital tools will help greater utilisation

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• Adequate and effective grievance redressal mechanism is required so that digital

tools can be used by citizens to bring accountability in the government offices
• Incentivise the adoption of new processes among individuals and entities
• Ensuring access, especially for people with disabilities.
While developing various infrastructures and ensuring connectivity is the foundation of
implementing digital tools for e-governance, it is not the end of the exercise. Taking the
above-mentioned steps will complete the puzzle for effective use of these tools for
achieving transparency, efficiency and accountability in governance.

8. According to the World Bank, while digital technologies have spread rapidly in much of
the world, resulting digital dividends have lagged behind. Analyse in the context of
India.
Approach:
• Write briefly about increased use of digital technology in India.
• Highlight expected potential benefits.
• Discuss causes for poor realization of digital dividends.
• Suggest measures to reap digital dividends.
Answer:
Digital technologies are making inroads in the remotest parts of India owing to various
government efforts and tech-inspired business initiatives of private sectors. No sectors
of Indian economy and public sector is left untouched by the digital revolution. The
government has made significant efforts to strengthen digital ecosystem in India
through initiatives like Bharat Net, Digital India, National e-governance Plan.
Digital dividends
Growth, jobs and services are the most important returns to digital investments. By
reducing information costs, digital technologies greatly lower the cost of economic and
social transactions for firms, individuals, and the public sector. They promote
innovation when transaction costs fall to essentially zero. They boost efficiency as
existing activities and services become cheaper, quicker, or more convenient. And they
increase inclusion as people get access to services that previously were out of reach.
In India, it is expected that wide scale use of digital technologies would usher good
governance, bring ease of doing business, create India as knowledge economy and
empower people of India, especially vulnerable section of society.
However, the World Bank in its recent report highlighted that digital dividends are not
spreading rapidly.
• Almost 1.063 billion Indians are offline and they cannot participate in the digital
economy in meaningful way.
• There exist digital divides across gender, geography, age, and income dimensions.
• Approximately 40% population is living below poverty line, illiteracy rate is more
than 25-30% and digital literacy is almost no-existent among more than 90% of
India’s population.
Not surprisingly, the better educated, well connected, and more capable have received
most of the benefits—circumscribing the gains from the digital revolution.

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What can be done reap digital dividends?

• Making the internet universally accessible and affordable should be a global

priority.
• Rapidly expand digital infrastructure and ensure its cyber security to imbibe
confidence for digital technologies among people of India
• To maximize the digital dividends requires better understanding of how technology
interacts with other factors that are important for development
• The digital economy also requires a strong foundation consisting of regulations,
that create a vibrant business climate and let firms leverage digital technologies to
compete and innovate; skills that allow workers, entrepreneurs, and public
servants to seize opportunities in the digital world; and accountable institutions
that use the internet to empower citizens.

8. Previous Year UPSC Questions

1. Though Citizens’ charters have been formulated by many public service delivery
organizations, there is no corresponding improvement in the level of citizens’ satisfaction
and quality of services being provided. Analyse. (2013)
2. “Effectiveness of the government system at various levels and people’s participation in
the governance system are inter-dependent”. Discuss their relationship in the context of
India. (2016)

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VISION IAS

VALUE ADDITION MATERIAL – 2018

PAPER II: GOVERNANCE

ROLE OF CIVIL SERVICES IN A DEMOCRACY

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ROLE OF CIVIL SERVICES IN A DEMOCRACY

Table of Contents
1. Civil Services in India .................................................................................................................. 2
1.1. Evolution of Civil Services in India ....................................................................................... 2
1.2. Current Status ..................................................................................................................... 3
1.3. Provisions with Respect to Civil Services in the Constitution ............................................. 4
2. Role of Civil Services in a Democracy ......................................................................................... 4
2.1. Substantive Role of Civil Servants ....................................................................................... 4
2.2. Bureaucracy and Democracy............................................................................................... 6
2.3. Cadre based Civil Service .................................................................................................... 7
3. Issues with Civil Services in India ............................................................................................... 9
3.1. Weberian Model of Bureaucracy and Related Issues ......................................................... 9
3.2. Issues with All India Services ............................................................................................. 10
3.2.1. Significance of All India Services (AIS) ........................................................................ 10
3.2.2. Issues with All India Services ...................................................................................... 11
3.2.3. Sarkaria Commission recommendations.................................................................... 12
4. Reforms Required in civil services ............................................................................................ 12
4.1. Bringing Accountability in Public Services......................................................................... 12
4.2. Emphasize Performance .................................................................................................... 13
4.3. Competition and Specialist Knowledge for Senior Level Appointments ........................... 13
4.4. Effective Disciplinary Regime ............................................................................................ 14
4.5. Transforming Work Culture ............................................................................................... 14
4.6. Streamline Rules and Procedures ..................................................................................... 15
4.7. Privatization and Contracting Out ..................................................................................... 15
4.8. Adoption of IT and E-Governance ..................................................................................... 15
4.9. Stability of Tenure ............................................................................................................. 15
4.10. Depoliticization of Civil Services ..................................................................................... 16
4.11. Lateral entry into civil services ........................................................................................ 17
4.12. Other Important Recommendations of 2nd ARC ............................................................ 18
5. Vision IAS GS Mains Test Series Questions............................................................................... 19
6. Previous Year UPSC GS Mains Questions ................................................................................. 25

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1. Civil Services in India

1.1. Evolution of Civil Services in India
The Indian civil service system is one of the oldest administrative systems in the world. In India,
it had its origin in the Mauryan period. Kautilya's Arthashastra lays down the principles of
selection and promotion of the civil servants, the conditions of loyalty for appointment to the
civil service, the methods of their performance evaluation and the code of conduct to be
followed by them.
The genesis of modern civil services can be traced back to the British Raj.
• During the period of Warren Hastings, the institution of collector was created in 1772. The
main duty of district collector was collection and management of revenue.
• Lord Cornwallis is known as the father of civil services in India. He reformed and organised
civil services. He separated revenue administration from judicial administration. The
collector was made head of revenue administration of the district.
• Prior to Lord Macaulay’s Report of the Select Committee of British Parliament, civil
servants were directly nominated by directors of the East India Company.
• The Charter Act of 1853 provided for open competition to civil services. But the Indian Civil
Service was divided into covenant and non-covenant with Indians being restricted to non-
covenant posts of lower bureaucracy only.
• In 1854, on the recommendations Macaulay’s report, Civil Services Commission was set up
to recruit civil servants. Initially examination was conducted only in London with minimum
and maximum age being 18 and 23 years respectively.
• Despite syllabus being heavily favored towards European Studies, Satyendranath Tagore
became first Indian to become a civil servant in 1864.
• Aitchinson Commission (1886) recommended the re-organization of the services on a new
pattern and divided the services into three groups - Imperial, Provincial and Subordinate.
The recruiting and controlling authority of Imperial services was the ‘Secretary of State’ and
for provincial services, it was states.
• The british government setup Indian Civil Service in 1911, primarily with the objective of
strengthening british administration.
• Though Indians petitioned for reforms for years, it was only after first world war and
Montagu Chelmsford reforms that changes were brought in the selection process.
• From 1922 onwards, examination was conducted in India as well. First in Allahabad and
then in Delhi with setting up of Federal Public Service Commission.
• The Government of India Act 1919 divided the Imperial Services into All India Services and
Central Services. The central services were concerned with matters under the direct control
of the Central Government.
• This Act also provided for the establishment of Public Services Commission in India. But the
establishment was delayed till 1926 when Lee Commission strongly recommended to
establish the commission.
• Further, the Government of India Act, 1935 envisaged a Public Service Commission for the
Federation and a Provincial Public Service Commission for each Province or group of
Provinces. Thus this act made Public Service Commission, Federal Public Service
Commission.
Police Services
• Imperial Police prior to Independence was appointed by Secretary of State through
competitive examination.

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• Entry into Imperial Police was thrown open to Indians only after 1920 and the following
year examinations for the service were conducted both in England and India.
• Despite recommendations of the Islington Commission and the Lee Commission,
Indianisation of police services remained slow with 20% of total posts in 1931.
Forest Services
• In 1864, Imperial Forest Department was set up. Imperial Forest Service was constituted in
1867. From 1867 to 1885, the officers appointed to Imperial Forest Service were trained in
France and Germany.
• In 1920, it was decided that further recruitment to the Imperial Forest Service would be
made by direct recruitment in England and India and by promotion from the provincial
service in India
With the inauguration of the Constitution of India in January 26, 1950, the Federal Public
Service Commission came to be known as the Union Public Service Commission, and the
Chairman and Members of the Federal Public Service Commission became Chairman and
Members of the Union Public Service Commission by virtue of Clause (1) of Article 378 of the
Constitution.
After independence, the civil servants were no more expected to perform the role of a police
state. The welfare of the Indian subjects was viewed as the central task to be performed by the
Indian state and hence they were to be an instrument to carry out welfare functions which,
among other things, included the settlement of refugees and providing minimum conditions for
their day-to-day living, safeguarding the national borders from external aggression and
promoting conditions responsible for internal peace.
The ethos of the civil service in independent-India changed from welfare-orientation in the late
1940s to development-orientation between the 1960s and 1980s, and finally to facilitator's role
in the 1990s, as dictated by the environmental challenges, collective choice mechanisms
reflected in the manifestos issued by the various political parties during the 1996, 2000 and
2004 general elections, and the challenge of meeting the democratic needs of the teeming
millions.
1.2. Current Status
In India, the various Civil Services at the Union and State levels can be classified in different
ways. Firstly, the Civil Services can be categorized into three broad groups –Central Civil
Services, All India Services and the State Civil Services.
• The Central Services function under the Union Government and are generally engaged in
administering subjects which are assigned to the Union under the Constitution.
• All India Services are common to the Union and the States and the State Services function
only under the State Governments.
• The Union and State Services can be classified into Group A, B, C and D categories based
on their role and responsibilities.
• These services can also be classified into technical and non-technical services.
The selections to the All India Services and Group A and some Group B services are conducted
by the Union Public Service Commission (UPSC). The incumbents to some Group B, Group C and
D services are selected by the Staff Selection Commission. The State governments have their
own State Public Service Commissions. The working of these Commissions is controlled by a
separate Act.

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1.3. Provisions with Respect to Civil Services in the Constitution

Part XIV of the constitution deals with provisions of civil services.
Article 309: Powers of Parliament and state legislatures
It empowers the Parliament and the State legislature regulate the recruitment, and conditions
of service of persons appointed, to public services and posts in connection with the affairs of
the Union or of any State respectively.
Article 310: Doctrine of Pleasure
Every person of Defence service, Civil Service and All India Service holding any post connected
with the above services holds office during the pleasure of the President or Governor of the
State.
Article 311: Dismissal, removal or reduction in rank
• No removal by subordinate authority: No member of a civil service holding a civil post
under the Union or State shall be dismissed or removed by an authority subordinate to that
by which he was appointed.
• Inquiry and informed of the charges: No such person as aforesaid shall be dismissed or
removed or reduced in rank except after an inquiry in which he has been informed of the
charges against him and given a reasonable opportunity of being heard in respect of those
charges.
Article 312: Creation of new All India service
If Rajya sabha passes a resolution supported by not less than two thirds of the members
present and voting, Parliament may by law provide for the creation of one or more All India
Service including an all-India judicial service common to the Union and the States, and regulate
the recruitment, and the conditions of service of persons appointed, to any such service.
Article 315 to 322: Deals with Public Service commissions.
Article 323A: Administrative Tribunals
Parliament may, by law, provide for the adjudication or trial by administrative tribunals of
disputes and complaints with respect to recruitment and conditions of service of persons
appointed to public services.

2. Role of Civil Services in a Democracy

2.1. Substantive Role of Civil Servants
Civil services perform the following important functions:
• Basis of government: No government can exist without administrative machinery. All
nations, irrespective of their system of government, require some sort of administrative
machinery for implementing policies.
• An instrument for implementing Laws and Policies: Civil services are responsible for
implementing the laws and policies of government. By carrying out laws, it regulates the
behaviour of the people in society. By implementing public policies and programmes, it
delivers the promised goods and services to the intended beneficiaries. An efficient civil
service can avoid waste, correct errors; limit the consequences of incompetence or
irresponsibility while implementing laws and public policies.
• Participation in policy formulation: Civil servants participate in policy making by giving
advice to ministers and providing them the necessary information. The administrative tasks
of public bureaucracy include formulation of policies and plans, executing and monitoring

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programmes, laying down laws, rules and regulations, which affect human actions in almost
all walks of life.
• Provides continuity: Civil services carry on the governance when governments change due
to elections etc. Ramsay Muir has remarked that while governments may come and go,
ministers may rise and fall, the administration of a country goes on forever. It is needless to
say that civil services form the backbone of administration.
• Role in socio- economic development: The developing nations are struggling to achieve
modernisation of society and economic development and realize welfare goals. These
objectives have placed challenging tasks on public administration such as formulation of
economic plans and their successful implementation to economic growth and social
change. Civil servants play an important role in socio-economic development in the
following ways:
o To develop agriculture, civil servants have to properly manage community resources
such as land, water resources, forests, wetlands and wasteland development.
o To facilitate industrial development, infrastructural facilities such as roads,
electricity, communications, market centres etc. have to be provided. In these
countries, the civil service manages government owned business, industrial enterprises
and public utility services
o Setting right developmental goals and priorities for agriculture, industry,
education, health, communications etc.
o Formulation and implementation of strategies and programmes for the
development and modernisation of the nation.
o Mobilisation of natural, human and financial resources and their proper utilization
for accomplishing developmental objectives.
o Development of human resources to secure the necessary managerial skills and
technical competence to carry out the developmental tasks.
o Creation of new administrative organisations and improving the capacity of the existing
ones for the developmental purposes.
o Securing the support of the people for developmental activities by involving them in
the process of development by creating appropriate attitude towards the socio-
economic changes that are taking place in society.
o Promotion of clean and green environment and protection of human rights.
• Developing a sense of nationhood: Several divisive forces such as communal and ethnic
conflicts, caste feuds and regional rivalries often threaten the national unity. In order to
develop a sense of nationhood among the people of these countries, the civil servants have
to resolve the sub-national and sub- cultural differences among the people.
• Facilitating democracy: The civil servants play a vital role in maintaining the democratic
ideals by assisting their political heads (Ministers) in policy-making function and in
implementing the policies made. Since developing countries are new to the democratic
institutions, it is only the stable and efficient civil service that can strengthen the
democracy.
• Calamities and crisis: Natural calamities such as earthquakes, floods, droughts and cyclones
have also enhanced the importance of civil services. In the event of occurrence of such
natural calamities, the public administrators have to act quickly and undertake rescue
operations in order to prevent loss of life and property of the affected people.
• Administrative adjudication: This is a quasi- judicial function performed by the civil service.
The civil servants settle disputes between the citizens and the state. For this purpose, the
Administrative Tribunals, with civil servants as judges are established. For example: The
Income Tax Appellate Tribunal.
• In addition to above, some other functions performed by civil service are:

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o Assisting ministers in fulfilling their responsibilities towards the parliament and its
committees.
o Handling financial operations of the state.
o Reforming and improving administration through O and M (i.e. organization and
methods)
2.2. Bureaucracy and Democracy
Bureaucracy is the executive arm of the government. Democracy is the process whereby the
government is elected by the people whereas Bureaucracy is the system in which elected
government employs competent state officials to run state matter. They are selected by
government through merit based process.
Evolution of bureaucracy since independence
• Nation Building: After independence, bureaucracy set out to implement agenda of its
political masters. It included commitment to democratic socialism, secularism and non-
alignment.
• Democratization of Bureaucracy: After the 1967 assembly elections, civil services got major
fillip with increased representation of backward castes. Later representation was given
impetus post Mandal commission recommendations. Experts argue that it led to
democratization of the bureaucracy.
• Committed Bureaucracy: This idea emerged in 1970s and 80s. The idea most
fundamentally, entailed that a bureaucrat should be hundred percent committed to the
policies and programmes of the political party in power. By extension, this also implied full
commitment to the individual politicians holding power. A bureaucrat was not to be guided
by any other consideration.
• License permit Raj: Due to socialist model of development, license was needed to start any
business –small or big. The discretionary power rested with bureaucracy who could give
license against favors granted by the concerned businessman.
• Globalization: It marked the watershed era for Indian bureaucracy. By liberalization of the
economy is meant freeing a national economy from governmental control and letting it run
as per the market forces
Issues
• Ministers or Bureaucrats: Critics argue that appointing legislators on the executive post is
faulty practice and rife with perils. Elected representatives should look to resolve social
issues and form laws, not become administrators. To expect them to deliver quality services
in the age of specialization and technology is absurd. When career politicians are placed in
charge of career administrators, it defeats the purpose of both.
• Politicization of bureaucracy: This defeats the bureaucrats' primary purpose of providing
non-partisan and efficient administration. As soon as the government changes, the
administrators have to train and teach ministers about the finer aspects and technicalities
of departments. Also the authority granted to politicians begets patronage, not
performance. And with no other oversight and scrutiny, they become cohorts in corruption.
• Politicians – bureaucrats – Businessman nexus: The nexus was borne out of license quota
raj where politicians and bureaucrats had discretionary power over allocation of natural
resources in the country. This led to this unholy nexus and crony capitalism. It has
undermined the democratic credentials of the country.
• Attitude of the bureaucracy: Subsequent to the structural adjustment of the economy
consequent to liberalization, there have been perceptible shifts in the attitude of the
bureaucracy. In the initial phase, they were openly hostile to these reforms. They proved to

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the obstruction to development, instead of being a facilitator. However, this trend has
changed over the years.
2.3. Cadre based Civil Service
What is Cadre based Civil Service?
▪ Cadre literally means a small group of trained people who form basic unit of a military,
political or business organization.
▪ In All India Services, once selected, candidates are assigned cadres based on their
preferences, merit and availability of positions.
▪ In India, each state is a cadre with some exceptions like AGMUT and DANICS. These are joint
state cadres with multiple states.
Need of Cadre system in civil Service
Key administrative and police positions in state governments are designated as ‘cadre posts’
signifying that they may only be held by IAS/IPS. This is deliberate features of All India Service
to promote quality, impartiality, integrity and All India outlook.
Issues with Cadre based Civil Services
Civil Services in India has been constitutionally designed in way that it maintains all India
character and ‘outsiders’ are posted in state cadre. ‘Outsiders’ to state cadre would ensure a
higher level of objectivity and neutrality in a system which was likely to face enormous regional
and local pressure. But in the 1980s and 90s, partisanship, local considerations and nepotism
crept into the system.
• Permanency of cadres: It results in inefficiency and ineffectiveness in the working of civil
services. It diminishes the all India character and limits the officers’ concern to local issues.
• Provincialization: According to ‘Public Institutions in India – Performance and Design by
Mehta and Kapoor’ there is a feeling that IAS officers are ‘all India’ in name only. As the
proportions of officers who genuinely alternate between state and central government has
declined.
• Adoption of best practices: Provincialization of civil services reduces capacity of the civil
services to adopt and disseminate good practices of other cadres.
• Collusion with local politicians: For the want of preferred and plum postings, the officers
collude with local politicians and officers.
• Specialized Positions: According to 2nd ARC, cadre based civil services has limited the
recruitment of persons with specialized knowledge at important positions through lateral
entry.
• Large variation: There are large variations in the size of IAS cadres with respect to total
state populations. As a result, the IAS cadre in UP is 40% smaller than it should be while in
Sikkim it is 15 % more than it should be, based on population alone.
• Central Deputation: According to ‘Public Institutions in India – Performance and Design by
Mehta and Kapoor’ many small states have much better representation in central ministries
and departments than their larger peers.
• Reluctance to ‘de-cadre’ positions: Due to changing social and economic conditions some
posts diminished in importance. But they were rarely ‘de-cadred’. For ex – In many states,
the post of Land Settlement Officer is still encadred, decades after overwhelming majority
of land tenure/land revenue settlement work was completed.
Way Ahead
• The New Cadre policy (2017) looks to resolve these issues. The new policy is aimed at
ensuring ‘national integration’ in the country’s top bureaucracy.

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• The new policy will seek to ensure that officers from Bihar, for instance, will get to work in
southern and north- eastern states, which may not be their preferred cadres.
• All India Services officers are supposed to have varied experience which can be earned if
they work in different states. It will also give them knowledge of best practices.

New Cadre Policy (2017)

In the new policy, aimed at “national integration”, divides the 26 states into 5 zonal cadres.
• Zone-I - AGMUT, Jammu, and Kashmir, Himachal Pradesh, Uttarakhand, Punjab, Rajasthan,
and Haryana
• Zone-II - Uttar Pradesh, Bihar, Jharkhand, and Odisha
• Zone-III - Gujarat, Maharashtra, Madhya Pradesh and Chhattisgarh
• Zone-IV - West Bengal, Sikkim, Assam-Meghalaya. Manipur, Tripura
• Zone-V - Telangana. Andhra Pradesh, Karnataka, Tamil Nadu and Kerala
Candidates have to give cadre choices in descending order of preference from among the
various zones. Candidates can only select one state/cadre from a zone as their first choice. Their
next choice has to be from a different zone. It is only after selecting first choice in all the zones,
one can select the second state/cadre from the first zone. Earlier the candidates used to choose
their home state as their first choice and neighbouring states as their subsequent preferences.

• Lateral Entry: Also the recent move by the government to directly recruit experts for
specialized position is a welcome move and in accordance with the recommendation of 2nd
ARC.
• Reduction in size of cadres: The proliferation of inconsequential posts is a proximate cause
of both demoralization and the ability to use transfer as a penalty. Therefore the size of
cadres should be reduced after periodic reviews.

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In May 2018, DoPT on the advice of PMO

has proposed to change the rules for
allocating services and cadres based on
the combined score of performance in the
Foundation Course and Civil Services
Examination. The proposal has been sent
to several departments for consideration.
Currently the cadres are allocated
completely based on the candidate’s
preference and rank in the Civil Services
examination.

3. Issues with Civil Services in India

3.1. Weberian Model of Bureaucracy and Related Issues
India inherited Weberian model of bureaucracy from the British. The Weberian bureaucracy
constitutes a career with a system of promotion based on seniority, fixed remuneration for
officials with a right of pension, organized as hierarchy and adhering to rigid rules.
Weber identified the following characteristics of bureaucracy:
• Officers are organised in a clearly defined hierarchy of offices.
• Candidates are selected on the basis of technical qualifications.
• They are remunerated by fixed salaries in money.
• It constitutes a career. There is a system of ‘promotion’ according to seniority or to
achievement or both.
• The official works entirely separated from ownership of the means of administration and
without appropriation of his positions.
• Each office has a defined sphere of competence.
• The officials are personally free and subject to authority only with respect to their
impersonal official obligations.
Experience has shown that old fashioned bureaucracies are unresponsive to people’s need, as
they are embroiled in red tape and formalism, love tradition and stand for conservatism and
status quo.
Today’s environment, where developments in the field of computers, electronics and avionics
have crushed time and space, demand institutions which are extremely flexible and adaptable,
so that they are capable of delivering high quality services to the people and meet multiple
challenges in a complex globalized world.
Commonwealth countries such as UK, New Zealand, Australia, Canada, Singapore have
discarded the Weberian model of bureaucracy and embraced a new philosophy known as New
Public Management (NPM), with dramatic increase in public service efficiency. The main
component of NPM philosophy is devolution of authority, performance contracting and
customer focus.

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The Indian civil service system is rank-based and does not follow the tenets of the position-
based civil services. This has led to the absence of a specialised civil service system in India. The
basic philosophy of the Indian civil service system has contributed a lot to this phenomenon, as
it puts heavy emphasis on the recruitment of generalists and not specialists. The incumbents of
the Indian civil service enjoy very short tenures, usually less than one year. All India Services
have been criticized for non-federal character.
Thus main issues associated with civil services in India can be summarized as:
• Problems of All India Services
• Absence of accountability
• Out-dated laws, rules and procedures
• High degree of centralization
• Poor work culture and Lack of professionalism
• Politicization of services and political Interference
• Negative power of abuse of authority and Corruption
• Generalist civil servants in globalized world
All these issues create a conflict between civil services and democracy in following ways:
• Rigid organization structures and cumbersome procedures.
• Elitist, authoritarian, conservative outlook.
• Men in bureaucracy fulfil segmental roles over which they have no control. Consequently,
they have little or no opportunity to exercise individual judgment.
• The requirement that a bureaucrat should follow the principles of consistency and
regularity automatically limits his capacity to adapt to changing circumstances.
• The general rules which may take for overall efficiency produce inefficiency and injustice in
individual cases.
• Civil services’ difficulty to cope with uncertainty and change is a key limit on its efficiency.
3.2. Issues with All India Services
3.2.1. Significance of All India Services (AIS)
Parliament passed the All India Services Act, 1951, empowering the Union Government, in
consultation with the State Governments, to make rules for regulation of recruitment and
conditions of service of persons appointed to these All India Services (AIS). The framers of the
Constitution also provided for creation of AIS in other spheres, if the Rajya Sabha declared, by
resolution supported by not less than two-thirds of the members present and voting.
All-India level services are rendered at national level with officers for these services being hired
at by central government through UPSC examination. However, their postings can be allotted at
both central as well as state government levels through different state level cadres.
• AIS promote the unity and solidarity of the country by combating parochial attitudes of the
States.
• Because the officers of these services are generally posted in states other than their own,
they are less susceptible to local and regional influences than officers from within the state
would be.
• The officers of these services can be and are rotated between the Centre and the states,
thus, facilitating liaison between the two.
• These services are recruited from a wide field and enjoy high remuneration, status and
prestige.
• The members of the AIS hold the key posts in the states, and they can give independent
advice to the state ministers, which the officers of state services may hesitate to do.

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• In the event of national or constitutional emergency, the Union government can act
through AIS.
• Union government stays in touch with ground realities through AIS.
3.2.2. Issues with All India Services
The Sarkaria Commission on Centre-State Relations sought the views of the State Governments
on:
• Whether the AIS have fulfilled the expectations of the Constitution makers; and
• Whether the State Government should have greater control over them.
Most of the State Governments agree that the AIS have, by and large, fulfilled the expectations
of the Constitution-makers. However, some State Governments have expressed concerns such
as:
• Relevance of AIS years after independence: The framers of the Constitution provided for
the AIS because of the serious problems of politico-administrative management and
instability then faced by the country. However, the Union and the State Governments have
since acquired adequate political, administrative and managerial experience.
• Indian Police Service (IPS): As all key positions in the State police are held by members of
IPS, the State Government's responsibility in regard to public order has got whittled down.
• Against Federalism: It is argued that winding up AIS and separate civil services of state and
centre would bring the working of these Governments closer to a federal system.
• The unity and integrity of the country and national integration should rest on more durable
factors, like economic prosperity, strong elective institutions, etc., and not on an
administrative apparatus, like the AIS.
• Authority –Responsibility Gap: AIS officers tend to think that they are under the
disciplinary control of the Union Government and not the State Government. A few State
Governments have emphasised that an AIS officer should be under the full disciplinary
control of 'the State Government under which he is serving.
• Cadre allocation Policy: The policy of the Union to induct at least 50% outsiders in each
State cadre of an AIS implies that these outsiders are more amenable to the control of the
Union Government than the insiders. This approach accentuates hostility between the AIS
and the State Services as well as between the former and the political leadership in a State.
States perceive this to be a clever ploy of the union government to gain control over state
government.
• Son of soil theory: Outsiders are vaguely aware about language, ethos, profile of the state
which they are posted.
• AIS under Union List: AIS are joint responsibility of centre and state, yet it is under Union
list (Entry 70).
• Formation of New AIS: The question of the formation of new AIS has been an important
area of friction between the Central Government and the States mainly due to three
reasons:
o creation of new AIS cuts at the effective spread of State services, thus, reducing the
employment opportunities for the sons of the soil,
o AIS encroach upon State autonomy, and
o they also involve larger expenditure because of high salary scales.
• Central Deputation: Unto 1984, central deputation was done on the consent of the state
government which has been dispensed with.

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3.2.3. Sarkaria Commission recommendations

• The AIS are as much necessary today as they were when the Constitution was framed.
• Any move to disband the AIS or to permit a State Government to opt out of the scheme
must be regarded as retrograde and harmful to the larger interest of the country.
• The AIS should be further strengthened and greater emphasis laid on the role expected to
be played by them. This can be achieved through well-planned improvements in selection,
training, deployment, development and promotion policies and methods.
• The present accent on generalism should yield place to greater specialisation in one or
more areas of public administration.
• Every AIS officer, whether be is a direct recruit or a promoted officer, should be required to
put in a minimum period under the Union Government and, for this purpose, the minimum
number of spells of Union deputation should be laid down for direct recruits and promoted
officers, separately.
• There should be regular consultations on the management of AIS between the Union and
the State Governments.
• For this purpose, an Advisory Council for Personnel Administration of the AIS may be set up,
comprising entirely of the senior most officers directly concerned with the issues to be
deliberated.
• It should meet periodically and regularly suggest solutions to the problems referred to it by
the Union and State governments.
• The Union Government may persuade the State Governments to agree to the constitution
of the Indian Service of Engineers, the Indian Medical and Health Service and an AIS for
Education.

4. Reforms Required in civil services

The important areas of civil services reforms and the recommendations of 2 nd Administrative
Reforms Commission (2nd ARC) and some other committees in these areas are as follows:
4.1. Bringing Accountability in Public Services
The concept of accountability refers to the degree which public servants and others in
nongovernmental sectors providing public programmes are responsive to those they serve. The
traditional measures of accountability that rely upon line or top-down measures do not
necessarily provide a good guide to the accountability culture as a whole. Thus, the most
important step needed is the recognition that multi-dimensionality of accountability means
both multiple measure and new mandates.
The 2nd ARC recommended the following in this regard:
• A system of two intensive reviews – one on completion of 14 years of service, and another
on completion of 20 years of service - should be established for all government servants.
• The first review at 14 years would primarily serve the purpose of intimating to the public
servant about his/her strengths and shortcomings for his/ her future advancement.
• The second review at 20 years would mainly serve to assess the fitness of the officer for
his/her further continuation in government service.
• The services of public servants, who are found to be unfit after the second review at 20
years, should be discontinued.
• A provision regarding this should be made in the proposed Civil Services Law.
• For new appointments it should be expressly provided that the period of employment shall
be for 20 years.

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• Further continuance in government service would depend upon the outcome of the
intensive performance reviews.
4.2. Emphasize Performance
The present promotion system in civil service is based on time-scale and is coupled by its
security of tenure. These elements in our civil service are making the dynamic civil servants
complacent and many of the promotions are based upon the patronage system. A government
servant’s promotion, career advancement and continuance in service should be linked to his
actual performance on the job and the dead wood should be weeded out.
• The promotions should be merit based and the respective authorities have to benchmark
the best practices and evaluate the performance of the civil servants both qualitatively and
quantitatively with a variety of parameters.
• Performance Related Incentive Scheme: The Sixth Pay Commission recommended
introduction of a new performance based pecuniary benefit, over and above regular salary,
for the government employees. It is based on the principle of differential reward for
differential performance. The end objective of introducing PRIS in government is not just
limited to improving employee motivation; obtaining higher productivity or output and
delivering quality public service; but it seeks larger goals of effectiveness and systematic
change for responsive governance.
• 2nd ARC recommendations on Performance Management system
o Making appraisal more consultative and transparent - performance appraisal systems
for all Services should be modified on the lines of the recently introduced PAR for the
All India Services.
o Performance appraisal should be year round: provisions for detailed work-plan and a
mid-year review should be introduced for all Services
o Guidelines need to be formulated for assigning numerical rating
o Government should expand the scope of the present performance appraisal system of
its employees to a comprehensive performance management system (PMS).
o The PMS should be designed within the overall strategic framework appropriate to the
particular ministry/department/organization.
4.3. Competition and Specialist Knowledge for Senior Level Appointments
The task of policy making in government is complex and needs specialist knowledge of the
subject. Under the existing system, the most senior level appointments in the Central
secretariat as well as top field level posts are made from amongst the Indian Administrative
Service (IAS) officers who are generalists.
• The First Administrative Reforms Commission, far back in 1969, had emphasized the need
for specialization by civil servants as a pre-qualification for holding senior level posts. It
suggested that all the Services should have an opportunity to enter middle and senior level
management levels in Central Secretariat and selection should be made by holding mid-
career competitive examination, which should include interview, to be conducted by UPSC.
• The Surendra Nath Committee (2003) and Hota Committee (2004) had also emphasized
domain knowledge and merit as the basis for appointment to the posts of Joint Secretary
and above.
2nd ARC recommendations in this regard:
• The 2ndARC identified 12 domains in which officers should specialize such as general
administration, urban development, security, rural Development etc. It has recommended
that domain should be assigned to all the officers of the All India Services and Central Civil
Services on completion of 13 years of service and vacancies at the level of Deputy

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Secretary/ Director should be filled only after matching the domain competence of the
officer for the job.
• The Commission has suggested introduction of competition for senior positions in the
Senior Administrative Grade and above (Joint Secretary level) by opening these positions to
all the Services.
• For Higher Administrative Grade posts (Additional Secretary and above) recruitment for
some of the posts could be done from open market.
• It has further suggested constitution of a statutory Central Civil Services Authority which
should deal with matters of assignment of domain, preparing panel for posting of officers at
different levels, fixing tenures and determining which posts should be advertised for lateral
entry.
4.4. Effective Disciplinary Regime
Presently, the provisions of discipline rules are so cumbersome that it becomes very difficult to
take action against a delinquent employee for insubordination and misbehaviour. Thus, once
appointed, it is almost impossible to remove or demote an employee. This results in poor work
culture and all round inefficiency.
The provisions of Civil Service Conduct and Discipline Rules are porous and complicated with
numerous loopholes and weighted in favour of the delinquent.
2nd ARC recommendations in this regard:
• The 2nd ARC has observed that legal protection given has created a climate of excessive
security without fear of penalty for incompetence and wrong doing.
• In the proposed Civil Services law, the minimum statutory disciplinary and dismissal
procedures required to satisfy the criteria of natural justice should be spelt out leaving the
details of the procedure to be followed to the respective government departments.
• The present oral inquiry process should be converted into a disciplinary meeting or
interview to be conducted by a superior officer in a summary manner without the trappings
and procedures borrowed from court trials.
• No penalty of removal and dismissal should be imposed, except by an Authority, which is at
least three levels above the post which the government servant is holding.
• No penalty may be imposed, unless an inquiry is conducted and the accused government
servant has been given an opportunity of being heard.
• The two-stage consultation with the CVC in cases involving a vigilance angle should be done
away with and only the second stage advice after completion of the disciplinary process
should be obtained.
• Consultation with the UPSC should be mandatory only in cases leading to the proposed
dismissal of government servants and all other types of disciplinary cases should be
exempted from the UPSC’s purview.
4.5. Transforming Work Culture
Most government departments suffer from poor work culture and low productivity. In order to
provide cost-effective efficient services, following measures can be taken:
• The multi-level hierarchical structure should be reduced and an officer oriented system
with level jumping be introduced to speed up decision making.
• Government offices should be modernized with provision of computer and other gadgets
and a conducive work environment should be created.
• Officers need to be motivated and empowered by giving them more responsibility and
decision-making authority.

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• There is a need to create a lean, thin and efficient government machinery by modernizing
procedures and work methodology and abolishing the ‘babu’ culture in the government
offices.
4.6. Streamline Rules and Procedures
A large number of rules and procedures relating to citizen's day to day interface with
government in matters such as issue of passport, registration of property, sanction for
construction of dwelling unit, licence for starting a business, inspection of factories, are
outdated and dysfunctional and give opportunity to public servants to delay and harass.
• These rules should be updated, simplified and discretionary power of public servants be
eliminated.
• A good part of efficiency of a government office depends on personnel, financial and
procurement management systems. The rules relating to personnel management are
outdated and rigid and give no flexibility to departments to adapt to local conditions
resulting in inefficiency.
• The budgetary and procurement rules should be changed, giving sufficient flexibility to
departments to be able to use their judgement to secure the best value for money.
4.7. Privatization and Contracting Out
In an era of liberalization, there is economic logic to privatize those state owned enterprises
which are either running in loss or in the tertiary sector of the economy such as hotel, tourism,
engineering and textile sector, where they cannot compete with private sector and are a big
drain on national resources.
• There is a strong case for privatization of services like municipal street cleaning, garbage
collection, power distribution, city transport etc.
• Experience has shown that increasing use of competition in the delivery of public services,
including competition between public and private sector providers has improved cost
effectiveness and service quality.
4.8. Adoption of IT and E-Governance
The revolution in information technology has brought into focus its adoption for good
governance.
• E-governance can reduce distances to nothing, linking remote villages to government
offices in the cities, can reduce staff, cut costs, check leaks in the governing system, and can
make the citizen-government interaction smooth, without queues and the tyranny of clerks.
• But it must be remembered that e-governance is only a tool for good governance. It cannot
succeed independent or responsive officers and it has to be owned by the political
leadership.
4.9. Stability of Tenure
There is a genuine problem being faced by officers, especially in the case of All India Services
serving in the state governments, relating to their tenures.
• There is usually a reshuffling of officers with change in government and in certain states the
average tenure of DM and SP has now come to less than a year only. Such a rapid turnover
of officers adversely affects delivery and quality of services provided to the common man.
• The ever present threat of transfer also affects the morale of the officers and their capacity
to stand up to undesirable local pressures.

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• In the long run, frequent transfer of officers of the All India Services in the states delays
implementation of projects and also prevents officers from picking-up meaningful
experience which would enhance their value to the state government and the Central
government when they hold higher positions at the policy making levels.
In this context Hota committee on civil services reform suggested the following:
• A fixed tenure of at least three years for an officer of the higher civil service along with
annual performance targets.
• A Civil Services Act has to be enacted to make the Civil Services Board / Establishment
Board both in the states and in the Government of India statutory in character.
• If a Chief Minister does not agree with the recommendations of the Civil Services Board/
Establishment Board, he will have to record his reasons in writing.
• An officer transferred before his normal tenure even under orders of the Chief Minister can
present the matter before a three-member Ombudsman.
• In all such premature transfers the Ombudsman shall send a report to the Governor of the
state, who shall cause it to be laid in an Annual Report before the State Legislature.
4.10. Depoliticization of Civil Services
Following are the recommendations of 2 nd ARC on relations between political executive and
civil servants:
• There is a need to safeguard the political neutrality and impartiality of the civil services.
• The onus for this lies equally on the political executive and the civil services.
• This aspect should be included in the Code of Ethics for Ministers as well as the Code of
Conduct for Public Servants.
• While examining the definition of corruption under the Prevention of Corruption Act, 1988,
the “abuse of authority unduly favouring or harming someone” and “obstruction of justice”
should be classified as an offence under the Act.

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• It is essential to lay down certain norms for recruitment in government to avoid complaints
of favouritism, nepotism, corruption and abuse of power. These norms are:
o Well-defined procedure for recruitment to all government jobs.
o Wide publicity and open competition for recruitment to all posts.
o Minimisation, if not elimination, of discretion in the recruitment process.
o Selection primarily on the basis of written examination or on the basis of performance
in existing public/board/university examination with minimum weight to interview.
To insulate the bureaucracy from political interference and to put an end to frequent transfers
of civil servants by political bosses, the Supreme Court in 2013 issued a series of directions to
insulate civil servants from political influence. Following are the directions issued by the
Supreme Court in T.S.R. Subramanian and others vs. Union of India:
• Officers of the Indian Administrative Service (IAS), other All India Services and other civil
servants were not bound to follow oral directives, since they "undermine credibility". All
actions must be taken by them on the basis of written communication.
• Establishment of a Civil Services Board (CSB), headed by the Cabinet Secretary at the
national level and chief secretaries at the state level, to recommend transfers and postings
of All India Services (IAS, IFS and IPS) officers. Their views could be overruled by the political
executive, but by recording reasons only.
• Parliament to enact a Civil Services Act under Article 309 of the Constitution setting up a
CSB
• There should be fixed minimum tenure.
• Group 'B' officers would be transferred by heads of departments (HoDs).
• No interference of ministers, other than the chief minister, in transfers or postings of civil
servants.
4.11. Lateral entry into civil services
Lateral entry into civil services refers to induction of eligible candidates into bureaucracy by
bypassing the regular mode at a higher level of its hierarchical structure.

In June 2018, the Department of Personnel and Training (DoPT) issued notification inviting
applications for 10 senior level positions at the joint secretary level in the Departments of
Economic Affairs, Revenue, Commerce and Highways among others.
The eligibility criteria includes “Individuals working at comparable levels in Private Sector
Companies, Consultancy Organisations, International/Multinational Organisations with a
minimum of 15 years' experience” besides those working in central public sector undertakings,
autonomous bodies, statutory organisations, research bodies and universities.
According to the DopT, the recruitment will be on contract basis for three to five years. The
intake will be made in 10 departments initially but will expand to other categories in the second
phase.

Need for lateral entry

• Shortage of Officers: There is shortage of officers in large states like UP, MP, Rajasthan and
Bihar. These are also those states were the social development as well as economic growth
numbers are dismal.
• Specialists and experts: Career bureaucrats, due to their frequent transfers and
deputations, remain generalists in nature. Also there is little incentives within the
bureaucracy to join advanced courses and gain cutting edge knowledge. Thus in the wake of
changing geo-political and economic environment, experts are needed for certain positions.

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• Burden to Exchequer: Recruitment through formal process comes with economic baggage
of lifetime of salary, pensions and other perks. Constitutional safeguards prevent removal of
even non-preforming officers. This anomaly could be resolved through lateral entry.
• Incentives to innovations: It is believed that bringing professionals from private sector
would bring fresh ideas and usher innovative problem solving methods to otherwise a
monolithic institution.
• Competition: It will push career bureaucrats towards healthy competition to perform
better. Also it will act as a warning sign of ‘perform or perish’.
Issues with lateral entry
• Bypassing UPSC: UPSC is a constitutional body and has retained legitimacy and credibility of
selection process over the years. Some experts opine that lateral entry is unconstitutional
in nature.
• Not a Panacea: It is also argued that it is a piecemeal effort to deal with a systemic
problem. Bureaucracy needs major overhauling.
• Offers not lucrative enough: Most of the times, the terms of recruitments are not
rewarding enough to attract best of talents. Even the recent lateral entry initiative would
recruit professionals for only 3 years with remuneration not competitive with private sector.
• Open door to privatization: Some civil servants believe that it would open the floodgates to
privatization. And eventually government would lose its socialist and welfare
characteristics.
• Transparency is recruitment: Government should ensure that the recruits remain
independent of “fissiparous tendencies. The sanctity of the selection procedure should
remain for the services to stay insulated from the government of the day.
Way Ahead
• 2nd ARC recommended an institutionalized, transparent process for lateral entry at both
the Central and state levels. But pushback from bureaucrats, serving and retired, and the
sheer institutional inertia of civil services that have existed largely unchanged for decades
have prevented progress.
• Also the parliamentary standing committee on external affairs headed by Dr. Shashi Tharoor
has urged the government to facilitate the entry of Non-Resident Indians (NRIs) into foreign
service in order to expand the country’s diplomatic corps.
• In addition to lateral entry, the method of civil service training also needs to be revamped.
4.12. Other Important Recommendations of 2nd ARC
2nd ARC in its 10th report “Refurnishing of Personnel administration” has made various
recommendations under 22 major headings. Few of the major recommendations are already in
the above topics. Some of the other important recommendations are:
Stage of Entry into the Civil Services
• Government of India should establish National Institutes of Public Administration to run
Bachelor’s Degree courses in public administration.
• Selected Central and other Universities should also be assisted to offer such graduate level
programmes.
• Graduates of the above mentioned special courses from the National Institutes of Public
Administration and selected universities would be eligible for appearing in the Civil Services
Examinations.

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Age of Entry and Number of Attempts

• For general candidates 21 to 25 years, for OBC 21 to 28 years and for SC/ST and physically
challenged candidates21 to 29 years should be the permissible age.
• The number of permissible attempts in the Civil Services Examination should be 3, 5, 6 and
6 respectively for general candidates, candidates from OBC, candidates from SC/ST and
physically challenged candidates respectively.
Capacity building
• Every government servant should undergo a mandatory training at the induction stage and
also periodically during his/her career. Successful completion of these trainings should be a
minimum necessary condition for confirmation in service and subsequent promotions.
• The objective of mid-career training should be to develop domain knowledge and
competence required for the changing job profile of the officer.
Motivating civil servants
• There is need to recognise the outstanding work of serving civil servants including through
National awards. Awards for recognizing good performance should also be instituted at the
State and district levels.
• Selections for foreign assignments should be made, based on the recommendations of the
Central Civil Services Authority.
Civil service reforms aim at strengthening administrative capability to perform core government
functions. These reforms raise the quality of services to the citizens that are essential to the
promotion of sustainable economic and social development.
Reforming public services poses a major challenge before the government. The biggest obstacle
comes from the bureaucracy, which, with its deep vested interest, resists any attempt to make
it performance oriented and accountable.
There is a need for political will at the highest level to bring meaningful reforms. It is time
Government makes a sobering realization that public service reform is an essential pre-requisite
to alleviate poverty, illiteracy, malnutrition and deprivation from the country and make India a
happy, healthy and prosperous place to live.

5. Vision IAS GS Mains Test Series Questions

1. Discuss the importance of mid-career performance appraisal for civil servants. Also
evaluate the feasibility and effectiveness of compulsorily retiring serving bureaucrats
after such a review.
Approach:
• Briefly give the present administrative condition in India
• Explain mid-career performance appraisal along with the features.
• Limitations of current performance appraisal system in India
• Importance and effect of mid-career performance appraisal system
• Compulsory retirement with its positives and negatives and conclusion I favour of
bureaucratic reforms.
Answer:
The civil servants in India have been provided with following safeguards:
• Constitutional protection
• Political neutrality

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• Permanency
• Recruitment based on merit etc.
This has led to problems surrounding current bureaucracy:
• Lacking transparency
• Unresponsive to public needs.
• Inefficiency
• Corrupt practices.
Inspite of two Administrative Reforms Commission reports not much has changed.
Problems with present system of appraisal and need for new appraisal system:
• A closed system for appraisal of civil servants in India (other than the All India
Services).
• It lacks in quantification of targets and evaluation of performance standards.
• Possible bias on the part of superiors, political influence; etc.
What is Mid Career Performance appraisal?
Mid-career Performance appraisal is meant to be a joint exercise between the
Government servant reported upon and the Reporting Officer particularly after every
fixed period for taking note on performance.
While fixing the targets, priority should be assigned item-wise, taking into consideration
the nature and the area of work.

Importance of Mid Career Performance appraisal

• It’ll update the knowledge and efficiency in work base of the participant in the
rapidly changing environment.
• Will help to develop competencies for changes in the job profile, as would happen
when a promotion takes place.
• Can also serve as a medium for enhancing formal qualifications, thereby creating
greater confidence in an officer.
• Good hardworking civil servants will get rewarded
• Clear performance standard shall be fixed.
• Reduction in political interference due to fixed targets and continuous reports of
performance of civil servants.
• It would compel bureaucrats to put more diligence to score a better review.
• Induce professionalism in the departments.
• Weeding out of the inefficient lot would make place for better candidates.
Positives of Compulsory retirements:
• Deterrence for non-performing officials.
• It may induce culture among officials of hard work and efficiency.
• Inertia among bureaucrats to start new work or take risk will be reduced
• Provide motivation to bureaucrats
Negative effects:
• May be misused as a political tool against honest officers.
• Although ministers and bureaucrats work hand in hand but this may give former
greater control on latter sometimes detrimental to officers efficiency.

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Compulsory retirement is a desirable approach as the efficacy of a system is

determined by the set of incentives facing people who exercise power. As bureaucrats
continue to wield enormous power, a guaranteed job provides the wrong incentives.
Hence the mid-term appraisal and compulsory retirement might be the much needed
bureaucratic reforms in India.

2. How does the short tenure of civil servants in India leads to their less effective
management? Critically discuss the move of setting up a civil services board in order
to address this issue.
Approach:
• Firstly, bring out a brief picture of issue of brief tenure of civil servants in India.
• Secondly, lay down the key issues associated with the short tenure of civil servants
in India.
• Thirdly, bringing out concept of setting up of civil service boards and discuss if it will
effectively resolve the persisting issues citing both benefits and concerns.
Answer:
Civil Servants do not have stability of tenure, particularly in the state governments,
where transfer and postings are made frequently, at the whims and fancies of the
executive head.
Following issues are associated with short tenure of civil servants:
• Short tenure and dependence on political class for postings leads to the
partisanship in civil servants giving rise to other menace like corruption, conflict of
interest, nepotism and erosion of neutrality.
• Lack of security of tenure for important posts in India had greatly hampered the
morale and efficiency of civil service.
• Short tenure leads to less effective performance measurement and appraisal of the
civil servants.
• Arbitrary transfer of civil servants holding important post sometime goes against
the principles of public interest and good governance.
• Stable tenures are necessary for enabling the incumbent to learn on the job,
develop his own capacity and then contribute in the best possible manner.
Thus, to safeguard the Civil service from politicization and patronization, the second
ARC as well the Supreme Court in 2013 recommended the setting up of the Civil Service
Board with objectives of:
• Shielding the bureaucracy from political interferences and put an end to frequent
transfers of civil servants
• Looking into the managements of transfers, postings, and inquiries, process of
promotion, rewards, punishment and disciplinary matters.
• Providing stability to the civil servants and will uphold the neutrality and
objectiveness in the functioning of civil servants.
But there are some issues that might hamper the purpose of setting up of the Civil
Service Boards:
• The competent authorities, i.e. Prime Minister in case of Centre and Chief Minister
in case State may amend, modify or reject the recommendation of the civil services
board for the reasons to be recorded in writing.

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Student Notes:

• The board is to be headed by the Chief Secretary of the State who might have
conflict of interest in the process.
Thus, apart from setting up of Civil Service Board, the political seclusion of it is required.
Also some watchdogs like clearance from Lokayukta in case of premature transfer could
be introduced into the setup.

3. The public policy requirements of the 21st century demand a bureaucracy less
generalist in nature. Analyse in the context of Indian civil services.
Approach:
• One can either introduce with the generalist v/s specialist debate or first list the
requirements of the 21st century bureaucracy and then approach the question.
• Associate the requirements of bureaucracy with ability of the generalist or the
specialist to meet them.
Answer:
In general, public servants are expected to be aware of multiple facets of public policy
rather than deep academic knowledge of only a few aspects. In the 21 st Century
challenges of public service are multifaceted and complex. This requires building
coalitions, creating specialised knowledge, less hierarchy, more collaboration, domain
expertise and flatter professional structures. In this regard, both specialist and
generalist approach of civil servants have their merits and demerits:
Adopting Specialist Approach:
• In a developing economy specialists should be right at the top in the line authority
rather than in a staff-cell attached to the generalist line authority. The advantage is
the government would become less bureaucratic, more programme-oriented and
committed.
• The generalist administrator usually does not develop a sustained interest in any
particular field of activity. Even in exceptional cases when he does develop such an
interest, this becomes infructuous because by the time he has learnt the job he is
transferred to some other job.
• The management and the administration (such as that of PSUs) should be well-
trained in the know-how of the enterprises that they manage. The emphasis should
shift from mere theoretical, bureaucratic control to a self-contained knowledgeable
set-up.
• It is said that generalists are prisoners of rules, regulations and precedents and
there is too much stress on continuity, caution, and red tape.
• Understanding amongst experts (i.e. people with similar domain expertise) is better
and it may result in conducive work environment and better policy.
Adopting Generalists Approach:
• Generalists Administration is politics in action. As one rises up the hierarchy, there
is less hands-on job and more management of resources. It vests in a bureaucrat a
successively larger responsibility for enforcing the general point of view of the
government.
• Top management job requires a general understanding. It requires a view of the
whole.

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Student Notes:

• Most specialists usually employ an esoteric language to convey their ideas. In

administration it leads to difficulty in communication between the non-expert
minister and the highly specialized expert secretaries.
Civil services thus require a mix of both generalists and specialists. However, the
current stranglehold of career bureaucracy has prevented willing and able experts from
outside the system to join the government. Even in ministries as complex as finance,
academic economists have been confined to that of advisory roles rather than
executive roles in most cases. Creating a specialist system of bureaucracy would mean
ending of monopoly at the top with the introduction of lateral entries, ending of ageism
as younger people will get to hold higher positions. These changes will improve
performance management and bring rationalist bureaucracy, as demanded by the 21st
century.

4. Bureaucracy has a love-hate relationship with democracy. As a servant it is invaluable

but as a master it can ruin us. Discuss in light of relationship between democracy and
bureaucracy in India since independence. Also, examine the ways in which the
democratic credentials of the bureaucracy can be strengthened.
Approach:
Discuss the importance of bureaucracy in democracy and then trace historical changes
in nature of bureaucracy by bringing out the points of conflict between bureaucracy
and democracy. Finally suggest reforms to improve the democratic credentials of
bureaucracy e.g. civil services reforms, RTI.
Answer:
Paradoxically, bureaucracy and democracy are often considered as complementary and
antithetical properties of political systems. Bureaucracy plays some important functions
in democracy e.g. Bureaucracy helps in strengthening rule of law, conducting free and
fair elections, establishing economic democracy and implementation/evaluation of
policies and monitors.
Bureaucracy in initial 40 years of democracy functioned as very powerful, secretive and
elitist organization in delivering public goods. However in post 1990s with emphasis on
participatory democracy and decentralization it has been changing its character to
more open and active organization sensitive to public needs.
However, there have been allegations against bureaucracy questioning its democratic
credentials:
• It transforms from an instrument to its institution having its own privileges and
concerns.
• The system rigidities, needless complexities and over centralisation in the policy
and management structures within the bureaucratic functions are too complex and
often too constraining.
• Our society is witnessing rapid changes in terms of economic growth, urbanization,
technological changes etc. The perception is that bureaucracy is resistant to such
changes.
• It often stifles the role of civil society, political parties and local bodies.
• Neutrality of bureaucrats stands compromised.

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Student Notes:

• Bureaucracy tends to become intrusive in private lives of people by developing

systems of collecting, storing, analysing and retrieving ever increasing values of
information about the citizens.
• Success of American bureaucracy is often related to its representative character. It
is considered as microcosm of entire society. Indian bureaucracy doesn’t measure
up to this standard.
Suggestions to improve democratic credentials of bureaucracy:
• The development works need some flexibility from a strict observance of rigid rules
and regulations.
• Reforms are required in the field of recruitment of civil servants.
• Effective implementation of tools such as RTI, Citizen Charter, Social Audit, Lokapl
etc.
• There must be exemplary and quick action against the corrupt.
• Bureaucracy should be oriented towards greater stakeholder participation.
• Strengthening e-governance will ensure accountability.
Decentralization of authority and collegiate decision will enhance democratic
credentials.

5. A healthy working relationship between Ministers and civil servants is critical for
good governance in a democracy, yet civil service must remain free from political
considerations. Comment.
Approach:
This question seeks to examine the relationship between the political and the
permanent executive. A civil servant is expected to be politically neutral and non-
partisan in his/her dealings. The answer must elaborate on how the concept of political
neutrality is being eroded over time and how it should be restored.
Answer:
Criticality of relationship between Civil Servant and Political Executive
• In a democracy, power vests with the people. This power is exercised through its
elected representatives who have the mandate to govern them for a specific
period.
• The civil services by virtue of its knowledge, experience and understanding of
public affairs assist the elected representatives in formulating policy and are
responsible for implementing these policies.
• Therefore, a healthy working relationship between Ministers and civil servants is
critical for good governance.
• Once a law is framed or rules and regulations are approved, they apply to everyone,
whether a member of the political executive or of the permanent civil service.
• A civil servant is required to implement the orders of government without bias,
with honesty and without fear or favour.
Civil service neutrality
• Unfortunately, the concept of civil service neutrality no longer holds good. Changes
in governments particularly at the state level often lead to wholesale transfer of
civil servants.
• Political neutrality is no longer the accepted norm with many civil servants getting
identified, rightly or wrongly, with a particular political dispensation.

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Student Notes:

• There is a perception that officers have to cultivate and seek patronage from
politicians for obtaining suitable positions even in the Union Government. As a
result, the civil services in public perception are often seen as increasingly
politicized.
• The political neutrality and impartiality of the civil services needs to be preserved.
The onus for this lies equally on the political executive and civil servants.
• Ministers must uphold the political impartiality of the civil service and not ask the
civil servants to act in any way which would conflict with the duties and
responsibilities of the civil servant.
• In a nutshell arbitrary and illegal interference by ministers or MPs or MLAs in the
work delegated to the bureaucracy is neither desirable nor beneficial for an
efficient government.

6. Previous Year UPSC GS Mains Questions

1. UPSC 2014: Has the Cadre based Civil Services organzation been the cause of slow change
in India? Critically examine.
2. UPSC 2016: Traditional bureaucratic structure and culture have hampered the process of
socio-economic development in India.” Comment.
3. UPSC 2017: Initially Civil Services in India were designed to achieve the goals of neutrality
and effectiveness, which seems to be lacking in the present context. Do you agree with the
view that drastic reforms are required in Civil Services? Comment.

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system or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without prior permission of Vision IAS.

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QUASI-JUDICIAL BODIES

Revised Value Addition Material

Content:
Quasi-Judicial Bodies in India
Emergence of Quasi-Judicial Bodies in India
Quasi-judicial Action vs Administrative Action
Examples of Quasi Judicial Bodies
Tribunals
Evolution of Tribunals
Judicial Review of Cases Handled by Tribunals
Categories of Tribunals in India
National Consumer Disputes Redressal Commission
Lok Adalats
Origin of Lok Adalats
Permanent Lok Adalats
Jurisdiction of Lok Adalats
Powers of Lok Adalats
Advantages of Lok Adalats
National Human Rights Commission
Composition
Functions
Appointment
Removal of a Member of the Commission
Working of NHRC
Strength of NHRC
Weaknesses of the Commission
Central Vigilance Commission
Composition
Removal
Functions
Working of CVC
Central Bureau of Investigation
Composition of CBI
Organization of CBI
Functions of CBI
CBI as ‘Caged Parrot’ and steps to make it free

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Central Information Commission
Composition and Appointment
Tenure and Removal
Powers and Functions of Information Commissions
Planning Commission
Functions
Composition
Internal Organization
Programme Evaluation Organization

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Copyright © by Vision IAS

All rights are reserved. No part of this document may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without prior permission of Vision IAS

www.visionias.in ©Vision IAS

 Student Notes:

Quasi-Judicial Bodies in India

A quasi-judicial body is an organization or individual on which powers resembling a court of law
have been conferred. Such a body can adjudicate and decide upon a situation and impose
penalty upon the guilty or regulate the conduct of an individual or entity.

A quasi-judicial body has also been defined as “an organ of government, other than a court or
legislature, which affects the rights of private parties through adjudication or rule-making.

Thus, a quasi-judicial body is one, which exercises a discretion that is essentially judicial in
character, but is not a tribunal within the judicial branch of the government and is not a court
exercising judicial power in the constitutional sense.

Emergence of Quasi-Judicial Bodies in India

• As the welfare state has grown up in size and functions, more and more litigations are
pending in the judiciary, making it over-burdened. It requires having an alternative
justice system.
• Ordinary judiciary has become dilatory and costly.
• With scientific and economic development, laws have become more complex,
demanding more technical knowledge about specific sectors.
• The conventional judiciary is suffering from procedural rigidity, which delays the
justice.
• Further, a bulk of decisions, which affect a private individual come not from courts, but
from administrative agencies exercising ad judicatory powers.

Quasi-judicial Action vs. Administrative Action

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Though the distinction between quasi-judicial and administrative action has become blurred,
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yet it does not mean that there is no distinction between the two.
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In A.K. Kraipak vs. Union of India, the Court was of the view that in order to determine whether
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the action of the administrative authority is quasi-judicial or administrative, one has to see the
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nature of power conferred, to whom power is given, the framework within which power is
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conferred and the consequences.

Thus broadly speaking, acts, which are required to be done on the subjective satisfaction of the
administrative authority, are called ‘administrative’ acts, while acts, which are required to be
done on objective satisfaction of the administrative authority, can be termed as quasi-judicial
acts.

Administrative decisions, which are founded on pre-determined standards, are called objective
decisions whereas decisions which involve a choice, as there is no fixed standard to be applied
are so called subjective decisions. The former is quasi-judicial decision, while the latter is
administrative decision. In case of administrative decision there is no legal obligation, upon the
person charged with the duty of reaching the decision, to consider and weigh submissions and
arguments or to collate any evidence. The grounds upon which he acts, and the means which
he takes to inform himself before acting are left entirely to his discretion.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
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 Student Notes:

However, the Supreme Court observed, “It is well settled that the old distinction between a
judicial act and administrative act has withered away and we have been liberated from the
pestilent incantation of administrative action.”

Examples of Quasi Judicial Bodies

• National and State Human Rights Commissions
• Lok Adalats
• Central and State Information Commissions
• Central Vigilance Commission
• Consumer Disputes Redressal Commission
• Central Administrative Tribunals
• Competition Commission Of India
• Appellate Tribunal For Electricity
• Railway Claims Tribunal
• Income Tax Appellate Tribunal
• Intellectual Property Appellate Tribunal
• Central Excise And Service Tax Appellate Tribunal
• State Sales Tax Appellate Tribunal

Note: The above list is not exhaustive.

Tribunals
There are a large number of laws, which charge the Executive with adjudicatory functions, and
the authorities so charged are, in the strict scene, administrative tribunals. Administrative
tribunals are agencies created by specific enactments. Administrative adjudication is a term
synonymously used with administrative decision-making.
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The decision-making or adjudicatory function is exercised in a variety of ways. However, the

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most popular mode of adjudication is through tribunals.

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The main characteristics of Administrative Tribunals are as follows:

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• Administrative Tribunal is a creation of a statute.

• An Administrative Tribunal is vested in the judicial power of the State and thereby
performs quasi-judicial functions as distinguished from pure administrative functions.
• Administrative Tribunal is bound to act judicially and follow the principles of natural
justice.
• It is required to act openly, fairly and impartially.
• An administrative Tribunal is not bound by the strict rules of procedure and evidence
prescribed by the civil procedure court.

Criticisms of Tribunals are as follows:

• The tribunal consists of members and heads that may not possess any background of
law.
• Tribunals do not rely on uniform precedence and hence may lead to arbitrary and
inconsistent decisions.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
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 Student Notes:

Evolution of Tribunals

The growth of Administrative Tribunals, both in developed and developing countries, has been
a significant phenomenon of the twentieth century. In India also, innumerable Tribunals have
been set up from time to time, both at the center and the states, covering various areas of
activities like trade, industry, banking, taxation etc. The question of establishment of
Administrative Tribunals to provide speedy and inexpensive relief to the government
employees, relating to grievances on recruitment and other conditions of service, had been
under the consideration of Government of India for a long time. Due to their heavy
preoccupation, long pending and backlog of cases, costs involved and time factors, Judicial
Courts could not offer the much-needed remedy to government servants, in their disputes with
the government. A need arose to set up an institution, which would help in dispensing prompt
relief to harassed employees, who perceive a sense of injustice and lack of fair play in dealing
with their service grievances. This would motivate the employees better and raise their morale,
which in turn would increase their productivity.

The First ARC and a Committee under J.C. Shah recommended the establishment of an
independent tribunal to exclusively deal with service matters. The same was validated by the
Supreme Court in 1980.

The Constitution (through 42ndAmendment Act, Article 323-A) empowered the Parliament to
provide for adjudication or trial by Administrative Tribunals of disputes and complaints with
respect to recruitment and constitution of service of persons appointed to public service and
posts in connection with the affairs of the union or of any state or local or other authority
within the territory of India or under the control of the government or any corporation, owned
or controlled by the government.

In pursuance of the provisions of Article 323-A of the Constitution, the Administrative Tribunals
Bill was introduced in Lok Sabha on 29thJanuary 1985 and received the assent of the President
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of India on 27th February 1985.

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Judicial Review of Cases Handled by Tribunals

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In S. P. Sampath Kumar case, the Supreme Court directed the carrying out of certain measures
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with a view to ensuring the functioning of the Administrative Tribunals along constitutionally
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sound principles. In an amendment the jurisdiction of the Supreme Court under article 32 was
restored. Constitutional validity of the Act was finally upheld in S. P. Sampath Kumar case
subject to certain amendments relating to the form and content of the Administrative Tribunals.
The suggested amendments were carried out by another amending Act. Thus the
Administrative Tribunals became an effective and real substitute for the High Courts.

However, in 1997, a seven-Judge Bench of the Supreme Court in L. Chandra Kumar held that
clause 2 (d) of article 323A and clause 3(d) of article 323B, to the extent they empower
Parliament to exclude the jurisdiction of the High Courts and the Supreme Court under articles
226/227 and 32 of the Constitution, are unconstitutional. The Court held that the jurisdiction
conferred upon the High Courts under articles 226/227 and upon the Supreme Court under
article 32 of the Constitution is part of the inviolable basic structure of our Constitution.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
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 Student Notes:

All decisions of the Administrative Tribunals are subject to scrutiny before a Division Bench of
the High Court within whose jurisdiction the concerned Tribunal falls. As a result, orders of the
Administrative Tribunals are being routinely appealed against in High Courts, whereas this was
not the position prior to the L. Chandra Kumar’s case. On 18th March 2006, the Administrative
Tribunals (Amendment) Bill, 2006 was introduced in Rajya Sabha to amend the Act by
incorporating therein, inter alia, provisions empowering the Central Government to abolish
Administrative Tribunals, and for appeal to High Court to bring the Act in line with L. Chandra
Kumar. The Department-related Parliamentary Standing Committee on Personnel, Public
Grievances, Law and Justice in its 17th Report said that the appeal to High Court is unnecessary,
and if a statutory appeal is to be provided it should lie to the Supreme Court only. The Law
Commission also took up the topic suo-moto and agreed with the opinion put forward by the
Parliamentary Standing Committee.

Categories of Tribunals in India

There are four categories of tribunals in India:

1. Administrative bodies exercising quasi-judicial functions, whether as part and parcel of
the Department or otherwise.
2. Administrative adjudicatory bodies, which are outside the control of the Department
involved in the dispute and hence decide disputes like a judge free from judicial bias
Example: The Income Tax Appellate Tribunal is under the Ministry of Law and not under
Ministry of Finance.
3. Tribunals under Article 136 in which the authority exercises inherent judicial powers of
the State. Because the functions of the body are considered important over the control,
composition and procedure, even Departmental bodies can be classified as Tribunals.
4. Tribunals constituted under Article 323A and 323B having constitutional origin and
enjoying the powers and status of a High Court.

National Consumer Disputes Redressal Commission

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The Consumer Protection Act was passed in 1986 to protect the interests of the consumers.
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The objective of this law is to provide a simple, fast and inexpensive mechanism to the citizens
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to redress their grievances in specified cases. By spelling out the rights and remedies of the
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consumers in a market so far dominated by organized manufacturers and traders of goods and
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providers of various types of services, the Act makes the dictum, caveat emptor (‘buyer
beware’) a thing of the past.

The Act envisages a three-tier quasi-judicial machinery at the National, State and District
levels:
i. National Consumer Disputes Redressal Commission - known as “National Commission”;
ii. State Consumer Disputes Redressal Commission known as “State Commission”; and
iii. District Consumer Disputes Redressal Forum - known as “District Forum”.

The Act also provides for establishment of Consumer Protection Councils at the Union, State
and District levels, whose main objectives are to promote and protect the rights of consumers.

Each District Forum is headed by a person who is, has been or is eligible to be appointed as a
District Judge and each State Commission is headed by a person who is or has been a Judge of a
High Court.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
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 Student Notes:

The provisions of this Act cover ‘goods’ as well as ‘services’. The goods are those, which are
manufactured or produced and sold to consumers through wholesalers and retailers. The
services are in the nature of transport, telephone, electricity, housing, banking, insurance,
medical treatment, etc.

A written complaint can be filed before the District Consumer Forum for pecuniary value of up
to Rs. twenty lakh, State Commission for value upto Rs. one crore and the National Commission
for value above Rs. one crore, in respect of defects in goods or deficiency in service. The service
can be of any description and the illustrations given above are only indicative. However, no
complaint can be filed for alleged deficiency in any service that is rendered free of charge or
under a contract of personal service.

The remedy under the Consumer Protection Act is an alternative in addition to that already
available to the aggrieved persons/consumers by way of civil suit. In the
complaint/appeal/petition submitted under the Act, a consumer is not required to pay any
court fee, but only a nominal fee.

Consumer Fora proceedings are summary in nature. The endeavor is made to grant relief to the
aggrieved consumer as quickly as possible, keeping in mind the provisions of the Act which lay
down time schedule for disposal of cases.

If a consumer is not satisfied by the decision of a District Forum, he can appeal to the State
Commission. Against the order of the State Commission, a consumer can come to the National
Commission.

In order to help achieve the objects of the Consumer Protection Act, the National Commission
has also been conferred with the power of administrative control over all the State
Commissions by calling for periodical returns regarding the institution, disposal and pendency
of cases.
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The National Commission is empowered to issue instructions regarding:

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• Adoption of uniform procedure in the hearing of the matters,

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• Prior service of copies of documents produced by one party to the opposite parties,
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Speedy grant of copies of documents, and

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• Generally over-seeing the functioning of the State Commissions and the District Forums
to ensure that the objects and purposes of the Act are best served, without interfering
with their quasi-judicial freedom.

Lok Adalats
The concept of Lok Adalat (People’s Court) is an innovative Indian contribution to the world
jurisprudence. The introduction of Lok Adalats added a new chapter to the justice dispensation
system of this country and succeeded in providing a supplementary forum to the victims for
satisfactory settlement of their disputes. This system is based on Gandhian principles. It is one
of the components of ADR (Alternative Dispute Resolution) systems. In ancient times, the
disputes were referred to “Panchayats”, which were established at village level. Panchayats
resolved the disputes through arbitration. It has proved to be a very effective alternative to
litigation. This concept of settlement of disputes through mediation, negotiation or arbitration

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
5 www.visionias.in ©Vision IAS
 Student Notes:

is conceptualized and institutionalized in the philosophy of Lok Adalat. It involves people who
are directly or indirectly affected by dispute resolution.

Origin of Lok Adalats

The concept of Lok Adalats was pushed back into oblivion in last few centuries before
independence and particularly during the British regime. Now, this concept has, once again,
been rejuvenated. It has become very popular and familiar amongst litigants. This is the system,
which has deep roots in Indian legal history and its close allegiance to the culture and
perception of justice in Indian ethos. Experience has shown that it is one of the very efficient
and important ADR mechanisms and most suited to the Indian environment, culture and
societal interests. Camps of Lok Adalats were started initially in Gujarat in March 1982 and now
it has been extended throughout the Country.

The evolution of this movement was a part of the strategy to relieve heavy burden on the
Courts with pending cases and to give relief to the litigants. The first Lok Adalat was held on
March 14, 1982 at Junagarh in Gujarat. Maharashtra commenced the Lok Nyayalaya in 1984.

The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats,
pursuant to the constitutional mandate in Article 39-A of the Constitution of India. It contains
various provisions for settlement of disputes through Lok Adalat. This Act mandates
constitution of legal services authorities to provide free and competent legal services to the
weaker sections of the society and to ensure that opportunities for securing justice are not
denied to any citizen by reason of economic or other disabilities. It also mandates organization
of Lok Adalats to secure that the operation of the legal system promotes justice on the basis of
equal opportunity. When statutory recognition had been given to Lok Adalat, it was specifically
provided that the award passed by the Lok Adalat formulating the terms of compromise will
have the force of decree of a court, which can be executed as a civil court decree. The evolution
of movement called Lok Adalat was a part of the strategy to relieve heavy burden on the Courts
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with pending cases and to give relief to the litigants who were in a queue to get justice. It
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contains various provisions for settlement of disputes through Lok Adalat.

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The parties are not allowed to be represented by the lawyers and encouraged to interact with
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judge who helps in arriving at amicable settlement. No fee is paid by the parties. Strict rule of
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Civil Procedural Court and evidence is not applied. Decision is by informal sitting and binding on
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the parties and no appeal lies against the order of the Lok Adalat.

Permanent Lok Adalats

In 2002, the Parliament brought about certain amendments to the Legal Services Authorities
Act, 1987 to institutionalize the Lok Adalats by making them a permanent body to settle the
disputes related to public utility services. The Central or State Authorities may, by notification,
establish Permanent Lok Adalats at any Permanent Lok Adalats, for determining issues in
connection to Public Utility Services.

Public Services include:

• Transport service
• Postal, telegraph or telephone services

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
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 Student Notes:

• Supply of power, light and water to public

• System of public conservancy or sanitation
• Insurance services and such other services as notified by the Central or State
Governments

Permanent Lok Adalats have the same powers that are vested in the Lok Adalats.

Jurisdiction of Lok Adalats

A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement
between the parties to a dispute in respect of:

i. any case pending before; or

ii. any matter which is falling within the jurisdiction of, and is not brought before, any
court for which the Lok Adalat is organised.

The Lok Adalat can compromise and settle even criminal cases, which are compoundable under
the relevant laws.

Lok Adalats have competence to deal with a number of cases like:

• Compoundable civil, revenue and criminal cases

• Motor accident compensation claims cases
• Partition Claims
• Damages Cases
• Matrimonial and family disputes
• Mutation of lands case
• Land Pattas cases
• Bonded Labor cases
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Land acquisition disputes

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• Bank’s unpaid loan cases

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Arrears of retirement benefits cases

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Family Court cases

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•
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Cases, which are not sub-judice

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Powers of Lok Adalats

1. The Lok Adalat shall have the powers of a civil court under the Code of Civil Procedure,
1908, while trying a suit, in respect of the following matters:
• Power to summon and enforce the attendance of any witness and to examine
him/her on oath.
• Power to enforce the discovery and production of any document.
• Power to receive evidence on affidavits,
• Power for requisitioning of any public record or document or copy thereof or
from any court.
• Such other matters as may be prescribed.
2. Every Lok Adalat shall have the power to specify its own procedure for the
determination of any dispute coming before it.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
7 www.visionias.in ©Vision IAS
 Student Notes:

3. All proceedings before a Lok Adalat shall be deemed to be judicial proceedings within
the meaning of Sections 193, 219 and 228 of IPC.
4. Every Lok Adalat shall be deemed to be a Civil Court for the purpose of Sec 195 and
Chapter XXVI of Cr.P.C.

Advantages of Lok Adalats

• Speedy Justice
• Economical
• Unburdening of Courts and thus reducing the backlog of cases
• Maintenance of Cordial Relations (since main thrust is on compromise and not
punishment)

National Human Rights Commission

In keeping with spirit of human rights movement all over the world, National Human Rights
Commission (NHRC) came into existence in India through an Ordinance promulgated on 28 th
September 1993 by the President of India. However, soon the ordinance was replaced by a
statute called Protection of Human Rights Act, 1993 (which came into force in 1994). This Act
provides for setting up NHRC at Centre as well as one Commission each at State level.

National Human Rights Commission is designed to protect human rights, defined as “rights
relating to life, liberty, equality and dignity of individual guaranteed by Constitution or
embodied in International Covenant and which are enforceable by Courts in India”.

Composition
• NHRC consists of a Chairperson and four members, all of them being full-time
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members. The Chairperson should be a retired Chief Justice of India and members
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should be serving or retired judges of the Supreme Court, a serving or retired Chief
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Justice of a High Court and two persons having knowledge or practical experience with
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respect to human rights.

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• Apart from these full-time members, the Commission also has four ex-officio members,
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the Chairpersons of National Commission for Minorities, National Commission for SCs &
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STs and National Commission for Women.

• Multi-membership is intended to reinforce independence and impartiality of the
Commission.
• The Chairperson and members hold office for a term of five years or until they attain
the age of 70 years, whichever is earlier. After their tenure, the Chairperson and
members are not eligible for further employment under the Central or a State
government.

Functions
• Proactively or reactively inquire into violations of human rights or negligence in the
prevention of such violation by a public servant
• By leave of the court, to intervene in court proceeding relating to human rights

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
8 www.visionias.in ©Vision IAS
 Student Notes:

• Visit any jail or other institution under the control of the State Government, where
persons are detained or lodged for purposes of treatment, reformation or protection,
for study of the living conditions of the inmates and make recommendations
• Review the Constitutional or legal safeguards in force for the protection of human
rights and recommend measures for their effective implementation
• Review the factors, including acts of terrorism that inhibit the enjoyment of human
rights and recommend appropriate remedial measures
• Study treaties and other international instruments on human rights and make
recommendations for their effective implementation
• Undertake and promote research in the field of human rights
• Engage in human rights education among various sections of society and promote
awareness of the safeguards available for the protection of these rights through
publications, the media, seminars and other available means
• Encourage the efforts of NGOs and institutions working in the field of human rights
• Such other function as it may consider it necessary for the protection of human rights.

Appointment

The Chairperson and members of the NHRC are appointed by the President of India, on the
recommendation of a Committee consisting of:

• The Prime Minister (Chairperson)

• The Home Minister
• The Leader of Opposition in the Lok Sabha
• The Leader of Opposition in the Rajya Sabha
• The Speaker of the Lok Sabha
• The Deputy Chairman of the Rajya Sabha
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Removal of a Member of the Commission

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Section 5 of the Protection of Human Rights Act describes the procedures and ground for the
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removal of the any member of the Commission. . The President may remove the Chairperson or
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any other Member if he:

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• Is adjudged an insolvent; or
• Engages during his term of office in any paid employment outside the duties of his
office; or
• Is unfit to continue in office by reason of infirmity of mind or body; or
• Is of unsound mind and stands so declared by a competent court; or
• Is convicted and sentenced to imprisonment for an offence, which in the opinion of the
President involves moral turpitude.

Additionally, the Chairperson or any other Member of the Commission shall only be removed
from his office by order of the President on the ground of proved misbehavior or incapacity.
However, in these cases, the President has to refer the matter to the Supreme Court for an
inquiry. If the Supreme Court, after the inquiry, upholds the cause of removal and advises so,
then the President can remove the Chairman or a member.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
9 www.visionias.in ©Vision IAS
 Student Notes:

Working of NHRC

The Commission has all powers of a Civil Court. It has its own investigating staff for investigation
into complaints of Human Rights violations. It is open to it to utilize services of any officer or
investigation agency of the Central Government or any State Government. The Commission
while inquiring into complaints of violations of human rights may call for information or report
from the Central Government or any State Government, or any other authority or organization
subordinate thereto within such time as may be specified by it.

The Commission is not empowered to inquire into any matter after the expiry of one year from
the date on which the act constituting violation of human rights is alleged to have been
committed. In other words, it can look into a matter within one year of its occurrence.

The Commission may take any of following steps upon completion of an enquiry:

• Where enquiry discloses the Commission of violation of Human Rights or negligence in

prevention of violation of Human Rights by a public servant, it may recommend to the
concerned Government or authority initiation of proceedings for prosecution or such
other function.
• It may recommend to the concerned government or authority to make payment of
compensation or damages to the victim.
• Approach SC or HC concerned for such directions, orders, or writs as the court may
deem necessary.
• Recommend to the concerned Government or authority for grant of such immediate
interim relief to victim or members of his family.

Strength of NHRC
1. The selection procedure of the members of NHRC is the main factor of its strength. The
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composition of the Selection Committee is such that it involves members of ruling as

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well as opposition party and both the Houses of Parliament. Also, the composition of
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NHRC is such that it involves Legislative, Executive, Judiciary, academicians and NGOs.
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This gives the Commission a broad vision to deal with the issues of Human Rights.
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2. Financial autonomy, though limited, has provided NHRC independence of Central

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Government. The Commission is free to make its own budget and spend it according to
its own planning. The draft of the proposed budget is placed before both the Houses of
Parliament and after the approval of the budget, the Government, without making any
amendment, has to provide finances to the Commission.
3. The Commission has the power to conduct suo-moto inquiry into the complaints of
Human Rights violations.
4. Easy accessibility to the Commission has made it one of the most popular organizations.
Anyone can approach NHRC through telephone, letter, application, mobile phone and
the Internet. All the documents, reports, newsletters, speeches, etc. of the Commission
are also available on this website. The status of the complaint too can be known
through its website. The popularity and trust on NHRC is quite evident from the fact
that while it had registered only 496 complaints in 1993-94, in 2004-05 the total
number of cases were 74,4019.
5. NHRC has advised the government a number of times on the issues of Human Rights.
Be it the cases of custodial deaths or suicide by the farmers or health issues or POTA,

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
10 www.visionias.in ©Vision IAS
 Student Notes:

child marriage, trafficking of women and children etc., the government has been taking
suggestions from NHRC.
6. NHRC, in a true democratic fashion, has worked immensely to create awareness among
public on Human Rights issues through seminars, workshops, lectures, literature, NGOs’
participation, universities’ collaborations, etc.
7. The Commission has extended its sphere from time to time. Support for right to
information, health care issues, disables’ rights, HIV/AIDS patients’ rights etc. are some
of the issues where NHRC has worked successfully.

Weaknesses of the Commission

1. In the process of selection of the members of the Commission, the Chairman is not
consulted.
2. Because of certain weakness in the Act, at times the Commission feels the need for the
amendments. But the Commission has constraints in doing so.
3. Another major weakness of the Commission is that it does not have powers to
investigate armed forces, BSF or any other paramilitary forces.
4. Finally, NHRC is only an investigative and recommendatory body. It does not have
power of prosecution.
5. It is dependent on the Government for manpower and money. The Central Government
shall pay to the Commission by way of grants such sums of money as it may consider fit.

Central Vigilance Commission

The CVC was established in 1964 by an executive resolution upon the recommendation of
Santhanam Committee on Prevention of Corruption (1962-64). In 2003, the Parliament enacted
a law conferring statutory status on the CVC.

In 2004, the Government of India authorized the CVC as the “Designated Agency” to receive
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written complaints for disclosure on any allegation of corruption or misuse of office and
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recommend appropriate action. The CVC is conceived to be the apex vigilance institution, free
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of control from any executive authority, monitoring all vigilance activity under the Central
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Government and advising various authorities in Central Government organizations in planning,

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executing, reviewing and reforming their vigilance work.

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Composition
The CVC is composed of a Chairperson (Central Vigilance Commissioner) and not more than two
members. The President appoints them upon the recommendation of a committee comprising
of:

• The Prime Minister as its head

• Union Minister of Home Affairs
• Leader of Opposition in Lok Sabha

They hold office for a term of four years or until they attain the age of sixty-five years,
whichever is earlier. They are not eligible for further employment under the Central or a State
Government upon expiry of their term.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
11 www.visionias.in ©Vision IAS
 Student Notes:

The appointment of P.J. Thomas as CVC in 2011 was quashed by the Supreme Court since he
was an accused in Kerala Palmolein case under Prevention of Corruption Act.

Removal

The President can remove any member from office under the following circumstances:

1. If he is adjudged insolvent; or
2. If he has been convicted of an offence which (in the opinion of the Central
Government) involves a moral turpitude; or
3. If he engages, during his term of office, in any paid employment outside the duties of
his office; or
4. If he is (in the opinion of the President), unfit to continue in office by reason of infirmity
of mind or body; or
5. If he has acquired such financial or other interest as is likely to affect prejudicially his
official functions.

In addition, the President can remove any member on the grounds of proved misbehavior or
incapacity. However, in this case, the President has to refer the matter to the Supreme Court for
an enquiry. If, after the enquiry, the Supreme Court upholds the cause of removal and advises
so, the President can remove him. He is deemed to be guilty of misbehavior if:

• He is concerned or interested in any contract or agreement made by the Central

Government, or
• He participates in any way in the profit of such contract or agreement or in any benefit
or emolument arising there from, otherwise than as a member and in common with
the other members of an incorporated company.
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Functions
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With respect to CBI:

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To exercise superintendence over the functioning of the Delhi Special Police

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Establishment (DSPE) (i.e. CBI)with respect to investigation under the Prevention of

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Corruption Act, 1988; or offence under CrPC for certain categories of public servants
and to give directions to the DSPE for purpose of discharging this responsibility;
• To give directions and to review the progress of investigations conducted by the DSPE
into offences alleged to have been committed under the Prevention of Corruption Act;
• As a fallout of the Vineet Narain case, the Supreme Court of India ruled that the
Director of the CBI (and Director of Enforcement) should be appointed on the
recommendations of a Committee headed by the Central Vigilance Commissioner, the
Home Secretary and the Secretary in the Department of Personnel as members. The
Committee should also take the opinion of the incumbent Director CBI before
forwarding their recommendations to the Appointments Committee of the Cabinet.
• The Committee concerned with the appointment of the Director of CBI is also
empowered to recommend, after consultation with the Director (CBI), appointment of
officers to the posts of the level of SP and above in DSPE.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
12 www.visionias.in ©Vision IAS
 Student Notes:

• The Committee concerned with the appointment of the Director of Enforcement is also
empowered to recommend, after consultation with the Director of Enforcement,
appointment of officers to the posts of the level of Deputy Director and above in the
Directorate of Enforcement.

With respect to Vigilance:

• To undertake an inquiry or cause an inquiry or investigation to be made into any

transaction in which a public servant working in any organization, to which the
executive control of the Government of India extends, is suspected or alleged to have
acted for an improper purpose or in a corrupt manner;
• To tender independent and impartial advice to the disciplinary and other authorities in
disciplinary cases, involving vigilance angle at different stages i.e. investigation, inquiry,
appeal, review etc.
• To exercise a general check and supervision over vigilance and anti-corruption work in
Ministries or Departments of the Government of India and other organizations to which
the executive power of the Union extends; and
• To undertake or cause an inquiry into complaints received under the Public Interest
Disclosure and Protection of Informer and recommend appropriate action.
• Respond to Central Government on mandatory consultation with the Commission
before making any rules or regulations governing the vigilance or disciplinary matters
relating to the persons appointed to the public services and posts in connection with
the affairs of the Union or to members of the All India Services
• The Central Government is required to consult the CVC in making rules and regulations
governing the vigilance and disciplinary matters relating to the members of Central
Services and All India Services.

Working of CVC
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The CVC conducts its proceedings at New Delhi. It has the powers of a Civil Court and is
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empowered to regulate its own procedure. It may call for information or report from the
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Central Government or its authorities so as to enable it to exercise general supervision over the
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vigilance and anti-corruption work.

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The CVC, after receiving the report of the inquiry undertaken by an agency, advises the Central
Government or its authorities upon further course of action. The Central Government or its
authorities shall consider such advise and take appropriate action. If it does not agree with the
advise of the CVC, it shall communicate the reasons for the same to the CVC.

Annual report of performance of CVC has to be presented to the President. The President
places this report before each House of the Parliament.

All Ministries/Departments in the Union Government have a Chief Vigilance Officer (CVO) who
heads the Vigilance Division of the organization concerned, assisting and advising the Secretary
or Head of Office in all matters pertaining to vigilance. He also provides a link between his
organization and the Central Vigilance Commission on the one hand and his organization and
the Central Bureau of Investigation on the other.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
13 www.visionias.in ©Vision IAS
 Student Notes:

Central Bureau of Investigation

The CBI owes its origin to the Delhi Special Police Establishment, established in 1941, to enquire
into cases of corruption in the procurement during the Second World War. Later, based on the
recommendations of the Santhanam Committee on Prevention of Corruption, CBI was
established by a resolution of the Ministry of Home Affairs. Later, it was transferred to the
Ministry of Personnel and now it enjoys the status of an attached office.

The CBI is not a statutory body. It derives its powers from the Delhi Special Police Establishment
Act, 1946.The CBI is the main investigating agency of the Central Government. It plays an
important role in the prevention of corruption and maintaining integrity in administration. It
works under the overall superintendence of Central Vigilance Commission in matters related to
the Prevention of Corruption Act, 1988.

Composition of CBI

The CBI is headed by a Director. He is assisted by a Special Director or an Additional Director.

Additionally, it has a number of joint directors, deputy inspector generals, superintendents of
police and all other usual ranks of police personnel.

The Director of CBI as Inspector-General of Police, Delhi Special Police Establishment, is

responsible for the administration of the organization. With the enactment of CVC Act, 2003,
the superintendence of Delhi Special Police Establishment vests with the Central Government
save investigations of offences under the Prevention of Corruption Act, 1988, in which, the
superintendence vests with the Central Vigilance Commission.

The Director of CBI has been provided security of two-year tenure in office by the CVC Act, 2003
(Vineet Narain Case). The CVC Act also provides the mechanism for the selection of the Director
of CBI and other officers of the rank of SP and above in the CBI. The Director of the CBI is
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appointed by the Central Government on the recommendation of a committee consisting of the

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Central Vigilance Commissioner as Chairperson, the Vigilance Commissioners, the Secretary to

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the Government of India in-charge of the Ministry of Home Affairs and the Secretary
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(Coordination and Public Grievances) in the Cabinet Secretariat.

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Organization of CBI

At present (2013), the CBI has the following divisions:

1. Anti-Corruption Division
2. Economic Offences Division
3. Special Crimes Division
4. Policy and International Police Cooperation Division
5. Administration Division
6. Directorate of Prosecution
7. Central Forensic Science Laboratory

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
14 www.visionias.in ©Vision IAS
 Student Notes:

Functions of CBI

The functions of CBI are:

i. Investigating cases of corruption, bribery and misconduct of Central government

employees
ii. Investigating cases relating to infringement of fiscal and economic laws, that is, breach
of laws concerning export and import control, customs and central excise, income tax,
foreign exchange regulations and so on. However, such cases are taken up either in
consultation with or at the request of the department concerned.
iii. Investigating serious crimes, having national and international ramifications, committed
by organized gangs of professional criminals.
iv. Coordinating the activities of the anti-corruption agencies and the various state police
forces.
v. Taking up, on the request of a state government, any case of public importance for
investigation.
vi. Maintaining crime statistics and disseminating criminal information.

The CBI is a multidisciplinary investigation agency of the Government of India and undertakes
investigation of corruption-related cases, economic offences and cases of conventional crime. It
normally confines its activities in the anti-corruption field to offences committed by the
employees of the Central Government and Union Territories and their public sector
undertakings. It takes up investigation of conventional crimes like murder, kidnapping, rape etc.,
on reference from the state governments or when directed by the Supreme Court/High Courts.
The CBI acts as the “National Central Bureau” of Interpol in India. The Interpol Wing of the CBI
coordinates requests for investigation-related activities originating from Indian law
enforcement agencies and the member countries of the Interpol.

CBI as ‘Caged Parrot’ and steps to make it free

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The SC raised questions on the CBI's independence while hearing the coalgate scam case, called
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it a "caged parrot speaking in its master's voice". The SC had then asked the Centre to make the
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CBI impartial and said it needs to be ensured that the CBI functions free of all external
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pressures.
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In response to this, the Centre filed an affidavit stating following measures it will adopt to
ensure the autonomy of the CBI:

i. CBI director will be appointed by a collegium comprising of the Prime Minister,

Chief Justice of India and Leader of the Opposition. The CBI director cannot be
appointed or removed without the consent of this collegium.
ii. The CBI director can be removed on the grounds of misbehavior only by an order
from the President after an inquiry.
iii. There will be an accountability commission headed by three retired Supreme Court
or High Court judges. The committee will look into cases of grievances against the
CBI.
iv. The affidavit said that CVC will have the power of superintendence and
administration over the CBI for all cases to be probed under the Prevention of
Corruption Act but such power would vest in the Centre for rest of the cases.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
15 www.visionias.in ©Vision IAS
 Student Notes:

v. A Bill would be introduced in Parliament to ensure financial autonomy to the

agency.
vi. Sanction for probe: Centre shall take a decision on a request to sanction for probe
against officers of the level of Jt. Secretary and above within a period of three
months and give reasons if sanction is denied.

Central Information Commission

The CIC was established by the Central Government in 2005 in accordance with the provisions
of Right to Information Act (2005).

Composition and Appointment

The Commission consists of a Chief Information Commissioner and not more than ten
Information Commissioners. They are appointed by the President upon the recommendation of
a committee comprising:

• The Prime Minister as Chairperson

• The Leader of Opposition in the Lok Sabha
• A Union Cabinet Minister nominated by the Prime Minister

They should be people of eminence in public life with wide knowledge and experience in law,
science and technology, social service, management, journalism, mass media or administration
and governance. They should not be a Member of Parliament or Member of the Legislature of
any State or Union Territory. They should not hold any other office of profit or connected with
any political party or carrying any business or pursuing any profession.

Tenure and Removal

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The members of CIC hold office for a term of five years or until they attain the age of sixty-five
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years, whichever is earlier. They are not eligible for reappointment. The Information
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Commissioner is eligible for appointment as Chief Information Commissioner but cannot hold
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office for more than a total of five years including his term as Information Commissioner.
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The President can remove any member from office under the following circumstances:

1. If he is adjudged insolvent; or
2. If he has been convicted of an offence which (in the opinion of the Central
Government) involves a moral turpitude; or
3. If he engages, during his term of office, in any paid employment outside the duties of
his office; or
4. If he is (in the opinion of the President), unfit to continue in office by reason of infirmity
of mind or body; or
5. If he has acquired such financial or other interest as is likely to affect prejudicially his
official functions.

In addition, the President can remove any member on the grounds of proved misbehavior or
incapacity. However, in this case, the President has to refer the matter to the Supreme Court for
an enquiry. If, after the enquiry, Supreme Court upholds the cause of removal and advises so,

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
16 www.visionias.in ©Vision IAS
 Student Notes:

the President can remove him. He is deemed to be guilty of misbehavior if:

• He is concerned or interested in any contract or agreement made by the Central

Government, or
• He participates in any way in the profit of such contract or agreement or in any benefit
or emolument arising there from otherwise than as a member and in common with the
other members of an incorporated company.

Powers and Functions of Information Commissions

1. The Central Information Commission/State Information Commission has a duty to
receive complaints from any person:
• Who has not been able to submit an information request because a PIO has not
been appointed
• Who has been refused information that was requested;
• Who has received no response to his/her information request within the
specified time limits
• Who thinks the fees charged are unreasonable
• Who thinks information given is incomplete or false or misleading
• Any other matter relating to obtaining information under this law
2. Power to order inquiry if there are reasonable grounds (suo moto power)
3. The Commission has the powers of Civil Court
4. All records covered by this law (including those covered by exemptions) must be given
to CIC/SIC during inquiry for examination
5. Power to secure compliance of its decisions from the public authority includes:
• Providing access to information in a particular form
• Directing the public authority to appoint a PIO/APIO where none exists
• Publishing information or categories of information
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• Making necessary changes to the practices relating to management,

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maintenance and destruction of records

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• Enhancing training provision for officials on RTI

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• Seeking an annual report from the public authority on compliance with this law
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• Requiring it to compensate for any loss or other detriment suffered by the

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applicant
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• Imposing penalties under this law

• Rejecting the application
6. The CIC submits annual report to the Central Government, which tables it in both the
Houses of Parliament. The SIC will submit the annual report to State Government,
which places it before the State Legislature (both Houses wherever applicable).
7. When a public authority does not confirm to provisions of RTI Act, the Commission may
recommend (to the authority) steps, which ought to be taken for promoting such
conformity.

The State Information Commission performs similar functions with respect to offices, financial
institutions, public sector undertakings, etc. which fall under the concerned State Government.

Rajinder Nagar: 1/8-B, 2nd Floor, Apsara Arcade, Near Gate 6, Karol Bagh Metro, Delhi
Mukherjee Nagar: 103, 1st Floor, B/1-2, Ansal Building, Behind UCO Bank, Delhi-9
09650617807, 09968029039, 09717162595
17 www.visionias.in ©Vision IAS
 Student Notes:

Planning Commission
The Planning Commission was established in March 1950 by an executive resolution of the
Government of India, (i.e. Union Cabinet) on the recommendation of the Advisory Planning
Board constituted in 1946, under the chairmanship of K C Neogi. Thus, the Planning
Commission is neither a constitutional body nor a statutory body. In other words, it is a non-
constitutional or extra-constitutional body (i.e. not created by the Constitution) and a non-
statutory body (not created by an act of Parliament). In India, it is the supreme organ of
planning for social and economic development.

Functions

The functions of the Planning Commission include the following:

i. To make an assessment of material, capital and human resources of the country

and investigate the possibilities of augmenting them.
ii. To formulate a plan for the most effective and balanced utilisation of the country’s
resources.
iii. To determine priorities and to define stages in which the plan should be carried
out.
iv. To indicate the factors that retard economic development.
v. To determine the nature of the machinery required for successful implementation
of the plan in each stage.
vi. To appraise, from time to time, the progress achieved in execution of the plan and
to recommend necessary adjustments.
vii. To make appropriate recommendations for facilitating the discharge of its duties, or
on a matter referred to it for advice by Central or state governments.
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The Allocation of Business Rules have assigned the following matters (in addition to the above)
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to the Planning Commission:

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i. Public co-operation in National Development

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ii. Specific programmes for area development notified from time to time
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iii. Perspective Planning

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iv. Institute of Applied Manpower Research

v. Unique Identification Authority of India (UIDAI)
vi. All matters relating to National Rainfed Area Authority (NRAA)

Earlier, the National Informatics Centre was also under the Planning Commission. Later, it was
brought under the Ministry of Information Technology. The Unique Identification Authority of
India (UIDAI) has been constituted in January, 2009 as an attached office under aegis of the
Planning Commission. With the transfer of National Rainfed Area Authority (NRAA) from
Ministry of Agriculture to the Planning Commission, all matters relating to the NRAA will
henceforth be looked after by the Planning Commission. It should be noted that the Planning
Commission is only a staff agency—an advisory body and has no executive responsibility. It is
not responsible for taking and implementing decisions. This responsibility rests with the Central
and State governments.

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Composition

The following points can be noted in context of the composition (membership) of the Planning
Commission:

i. The Prime Minister of India has been the chairman of the Commission. He presides
over the meetings of the Commission.
ii. The Commission has a Deputy Chairman. He is the de facto executive head (i.e.,
full-time functional head) of the Commission. He is responsible for the formulation
and submission of the draft Five-Year Plan to the Central Cabinet. He is appointed
by the Central Cabinet for a fixed tenure and enjoys the rank of a Cabinet Minister.
Though he is not a member of Cabinet, he is invited to attend all its meeting
(without a right to vote).
iii. Some Central Ministers are appointed as part-time members of the Commission. In
any case, the Finance Minister and planning minister are the ex-officio (by virtue of)
members of the Commission.
iv. The Commission has four to seven full-time expert members. They enjoy the rank
of a Minister of State.
v. The Commission has a Member-Secretary. He is usually a senior member of IAS.

The state governments are not represented in the Commission in any way. Thus, the Planning
Commission is wholly a centre-constituted body.

Internal Organization

The Planning Commission has the following three organs:

1. Technical Divisions
2. Housekeeping Branches
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3. Programme Advisors
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Technical Divisions: The technical divisions are the major functional units of Planning
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Commission. They are mainly concerned with plan formulation, plan monitoring and plan
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evaluation. These fall under two broad categories, that is, general divisions (concerned with
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aspects of the entire economy) and subject divisions (concerned with specified fields of
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development).

Housekeeping Branches: The Planning Commission has the following housekeeping branches:

1. General administration branch.

2. Establishment branch.
3. Vigilance branch.
4. Accounts branch.
5. Personal training branch.

Programme Evaluation Organization

The Programme Evaluation Organization (PEO) was established in 1952 as an independent unit
of the Planning Commission. However, it functions under the general guidance and direction of

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the Planning Commission. The PEO is headed by a Director/Chief who is assisted by Joint
Directors, Deputy Directors, Assistant Directors and other staff. The PEO has seven regional
offices at Chennai, Hyderabad, Mumbai, Lucknow, Chandigarh, Jaipur and Kolkata. Each regional
evaluation office of PEO is headed by a Deputy Director. The PEO undertakes an assessment of
the implementation of development programmes and plans as contained in Five-Year Plans to
provide, from time to time, feedback to the Planning Commission and executive agencies. It
also provides technical advice to state evaluation organizations.

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Copyright © by Vision IAS

All rights are reserved. No part of this document may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without prior permission of Vision IAS

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 VISIONIAS ™
152 www.visionias.in
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REGULATORY AUTHORITIES IN INDIA

Content:
1 Introduction Revised Value Addition Material

Background
Need
2 Regulation in India
Evolution of Regulation in India
Types of Regulation in India
Categories of Regulators in India
Statutory Independent Regulatory Agencies
Self Regulatory Authorities
Issues Related to Regulation in India
Independence
Accountability
Transparency
Important Regulatory Bodies
Securities and Exchange Board of India
Insurance Regulatory and Development Authority
Competition Commission of India
Telecom Regulatory Authority of India (TRAI)
Interaction between Policy Makers and Regulators and its Current Status
Participation of Stakeholders in the Regulatory Process
Competition Authority vs. Sector Regulators
Consumer Redress
Regulatory Coherence
Future Course of Action
3 Fiscal Sector Legislative Reforms Commission (FSLRC)
Comments Relating to Independence of Regulatory Bodies
Recommendation with Regards to Accountability
4 Recommendations of 2nd ARC
5 Single Super-Regulator vs. Multiple Regulators
Arguments in favor of Unified Supervision
Arguments against Unified Regulation
6 Enforcement Directorate
Origin and Evolution
Functions

Copyright © by Vision IAS

All rights are reserved. No part of this document may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without prior permission of Vision IAS

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 Student Notes:

1] Introduction
Regulation may be broadly understood as an effort by the state to address social risk, market
failure or equity concerns through rule-based direction of social and individual action.
Regulation is an attempt to control or influence private behaviour in the desired direction by
imposing costs on or proscribing undesirable behaviour. Since regulation can have important
consequences for economic efficiency and private incentives, it is usually justified only under
special conditions like prevention of market failures, restriction or removal of anti-competitive
practices, and promotion of public interest.
Background
The role of the state in economic and social life has dramatically changed from being the main
provider of social and economic services to being a rule-maker and regulator. The new mode of
the state with its structures and relationships is characterised by an increase in the regulatory
functions and responsibilities. These changes have paved the way to the emergence of a state
increasingly defined by the volume, diversity and complexity of its regulatory institutions. This
state is known as the regulatory state.
Contrary to what was expected, liberalisation and privatisation during the 1980s and 1990s
have led to a vast growth in the state’s regulatory obligations. In India, the regulatory role of
government stems from the provisions of the Constitution, which empower the Union and
State Legislatures to make laws on various subjects. The Constitution empowers the State to
impose reasonable restrictions on the exercise of various rights conferred by Article 19 in the
interest of public order, sovereignty and integrity of India, protecting the interest of the general
public, or in the interest of decency, morality etc. Consequently, there is a plethora of laws and
rules, which seek to regulate the activities of individuals and groups of individuals. The
Constitution as well as the laws enacted by Parliament have established the institutions and
mechanisms to enforce the laws and rules. Article 53(1) of the Constitution regulates the
exercise of the executive powers of the Union. Further, Article 53(3) authorizes the Parliament
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to confer by law such functions to ‘authorities’.

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Need
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There are three sets of justifications for regulatory interventions:

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(i) Prevention of Market Failure

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Market failure is a condition in which the market mechanism fails to allocate resources
efficiently to maximize social welfare. Market failures occur in the provision of public goods, in
case of natural monopolies or asymmetric information, and in the presence of externalities.
• A natural monopoly occurs when an entire market is more efficiently served by one
firm than by two or more firms due to increasing returns to scale. Natural monopolies
enjoy scale benefits that protect them from competition; entry by other firms tend to
lead to inefficient production i.e. the average cost of output is much higher with entry
by multiple firms than with the existence of just one firm. In such cases, regulation may
be necessary to protect consumer interests. In doing so, regulation might bar the entry
of new firms into the sector and protect the monopoly status of the incumbent
operator. In India, the transmission and distribution of electricity is still natural
monopolies.
• Asymmetric information is a situation where one party to a transaction knows more
about the product than another. This prevents the market mechanism from achieving

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an efficient allocation of resources. This creates a role for regulation of market

transactions or provision of information by a third party to remove or minimize
information asymmetries. In India, considerable information asymmetries exist in the
health and education sector.
• Externalities constitute another source of market failure and are defined as the effects
of production or consumption activity, positive or negative, on actors not involved in
the relevant product market. For example, an industrial plant discharging waste into a
river imposes a negative externality (costs) on users downstream. These costs are not
factored into production decisions at the plant, but are instead borne by society.
Regulation, in such circumstances, may be considered appropriate to restore economic
efficiency. Unregulated production and consumption externalities are common in India,
as in other developing economies.
Therefore, prevention of market failures, restriction or removal of anti-competitive practices,
and promotion of public interest required judicial safeguards.
(ii) To check anti-competitive practices
Firms may resort to anti-competitive practices such as price fixing, market sharing or abuse of
dominant or monopoly power. Laws that empower officials to take action can help deter such
practices. Regulation through a set of transparent, consistent, and non-discriminatory rules can
create a competitive and dynamic environment in which market players can thrive. In its
absence, anti-competitive practices and regulatory failures may not allow the market process to
yield socially optimal outcomes.
(iii) To promote the public interest
A third set of justification arises from concerns about the promotion of public interest, which is
an important policy objective for governments. Ensuring fair access, non-discrimination,
affirmative action, or any other matter of public importance can provide an important reason
for regulation. Some major regulations in this regard in India are:
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• Support Pricing: Government offering to buy wheat or rice from farmers at a price
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which is higher than the market price

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• Public Distribution System: Supply of food grains at a price which is lower than the
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market price
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• Free Distribution: Distribution of piped water and free power to agriculture, which is a
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regulatory decision to levy zero tariffs, stemming from policy stances

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2] Regulation in India
Evolution of Regulation in India
Post-independence, India experimented with a “socialist mixed economy model" with the state
retaining control over the commanding heights of the economy – heavy industries and utilities.
While private sector activity was allowed, the government tried to control it through a web of
controls such as licensing and quotas in regard to intermediate goods, imports and outputs.
Such controls were complemented by high tariff walls. Thus, the government was not only a
producer and regulator of strategic and important goods and services; it also exerted direct
control over the output, and sometimes even associated prices, of private sector activity. Given
that electoral pressures exerted by various interest groups did affect regulatory actions by the

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government, such regulation can hardly be labeled as “independent”. After 1985, the Indian
economy embarked on a process of domestic reform, which involved the following elements –
delicensing of industries and abolition of output quotas or bounds on outputs of firms,
permission for private entry into sectors, which were hitherto the monopoly of the
government, and liberalisation of quotas and tariffs on capital good imports.
From 1991 onwards, liberalisation of the external sector meant that tariff reductions were
extended to almost the entire spectrum of merchandise trade and conditions for foreign
investment were simplified and liberalised. The process of domestic reform and external
liberalisation is still ongoing. However, the producer profile in various sectors has undergone a
significant change with private firms co-existing with government firms in many sectors, which
were previously government monopolies (e.g. electricity, telecommunications). The consensus
among decision makers has been that independent regulation is required in such sectors to
guarantee a level playing field. As a result, independent regulators have been constituted in
various sectors, starting with electricity and telecommunications, and the number is still on the
rise. Regulation in India can be mapped under three broad categories: economic regulation,
regulation in the public interest and environmental regulation.
Types of Regulation in India
Regulation in India can be mapped under three broad categories: economic regulation,
regulation in the public interest and environmental regulation.
(i) Economic Regulation
Economic regulation aims at preventing or tackling market failure. This is achieved with rules
that proscribe and punish market distorting behaviour. In the Indian context include The
Electricity Act of 2003, which allows State regulators to fix tariffs for power consumption, thus
preventing suppliers from taking advantage of natural monopolies.
(ii) Regulation in the Public Interest
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This covers areas where industries are failing to meet a standard or uphold something of public
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importance. This is different from market failure. A classic case is of health and safety, where
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firms can fall short in protecting employees or the general public from harm. The Bureau of
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Indian Standards (BIS) created by the Bureau of Indian Standards Act, 1986 has been setting
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quality and safety standards for various products, some of which are mandatory. Such
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regulations are necessary due to low level of consumer awareness, skewed income
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distribution and lack of capacity of majority of the population to pay for essential services,
essential needs such as food security. This calls for support pricing of food grains and
encourages farmers to maintain a higher acreage under food grain cultivation, thereby
enhancing food security.
(iii) Environmental Regulation
Environmental regulation covers actions to protect the environment from harm. A healthy
environment is desirable not just on aesthetic grounds, but because environmental degradation
imposes costs on land, labour and resources that have important consequences for economic
development. In India, environment protection has been given constitutional status. The
Directive Principles of State Policy state that protecting and improving the environment is the
duty of the State as well as citizens of the country. The Government of India has enacted
various laws to protect the environment through the Environment (Protection) Act, 1986 as
the umbrella legislation. Ministry of Environment and Forests is the nodal agency for

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 Student Notes:

environmental legislation. However, several states have also enacted their own legislation
besides the major ones enacted by the Central Ministry. The State Pollution Control Board
(SPCB) established in each state, is responsible for implementing these legislations as well as
issuing rules and regulations prescribing the standards for a clean environment. The activities of
SPCBs are coordinated by the Central Pollution Control Board (CPCB).
Categories of Regulators in India
There are primarily two types of regulatory agencies:
Statutory Independent Regulatory Agencies
Regulation by government through its own Departments or Agencies directly under its control
has always existed. The last century has seen the emergence of a special category of regulatory
systems – the Independent Statutory Regulating Agencies. These agencies differ from the
conventional regulating system as they are separated from the executive wing of the
government and enjoy a certain degree of autonomy. The concept of independent regulations
took birth in USA. The basic premise of the establishment of these agencies being that a market
based economy needs to be regulated in order to ensure a level playing field to all and also to
safeguard the larger public and national interest. Other factors, which favoured the creation of
independent regulators were:
i. Increasing complexities and the advancement of technologies required for handling
of issues by experts;
ii. Public interest is best served by insulating decision-making in certain issues, from
political interference.
In India, with the initiation of the process of economic liberalization in the early 90s,
government withdrew from many activities, which hitherto were monopolized by it. The entry
of corporate sector necessitated certain measures to boost the investor competence and to
safeguard public interest. One such measure was setting up of independent regulators. In
addition, the traditional departmental structure of government was not best suited to play the
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dual role of a policy making as well as regulating the sector concerned.

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Self Regulatory Authorities

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These Authorities are created under different laws but they are self-regulatory in nature. The
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functions of Self-Regulatory Bodies may include: (i) issues of professional education (ii) matters
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connected with licensing, and ethical conduct of the practitioners.

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Issues Related to Regulation in India

Independence
Regulatory efficacy demands functional independence, which calls for the regulator maintaining
an arm’s length relationship from interest groups. One aspect of such autonomy is the ability of
the regulator to access funds, the magnitude of which does not depend on the whim of the line
ministry i.e. financial independence. However, independence requires satisfaction of other pre-
conditions- regulators once appointed should have fixed tenure and immunity from removal
except in the case of incompetence and moral turpitude. In India, sector regulators have been
mandated with independence though such autonomy is limited in various aspects. Moreover,
there is a difference between mandated and delegated independence, with the latter much
lower than the former due to control exercised by the executive. Functional independence is
often curbed by the dependence of regulators on concerned line ministries for budgetary

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allocations and sanctioning of staff appointments as well as the need for the former to report to
the latter. Again on the lines of what has been mentioned above, there is no uniformity in the
independence and funding of different regulators. While the Finance Ministry has been
proactive in providing secure funding and resultant independence to the regulators reporting to
it, this principle has been largely ignored by many other ministries.
Accountability
Independence must go hand in hand with accountability. Along with independence, all
regulators need to be accountable. Appropriate mechanisms are required to make independent
regulatory agencies accountable. Accountability is of two types: political and legal. In India,
regulatory bodies in general have the following features that are relevant to their
accountability:
i. They have been constituted on the basis of statute, which also lays down terms of
appointment and removal of Board Members.
ii. Their decisions can be appealed against before a specified appellant authority in most
cases. Naturally, they are also subject to the writ jurisdictions of High Courts and the
Supreme Court.
iii. The accounts of regulator are audited by the Comptroller and Auditor General.
iv. They are legally bound to prepare an annual report and submit to the Government,
which in turn lays it before each House of Parliament.
v. The respective statutes have mandated that regulators shall ensure transparency while
exercising their powers and discharging their functions.
vi. The Chairman, Members and officers of regulators are deemed to be public servants
within the meaning of Section 21 of the Indian Penal Code (IPC).
Parliamentary supervision seems to be the ideal form of political accountability as
accountability to the line ministry can often be associated with pressure being exerted on the
regulator to favour utilities being operated by the ministry. Similarly, vested interest groups
often find it easier to effectively pressurise the regulator through the line ministry rather than
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through the Parliament. Therefore, replacing the line ministry’s control by Parliamentary
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supervision across the board is necessary. This provision was also put forward by 2nd ARC, as
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discussed in a subsequent section.

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The regulator’s actions are questioned only when there is an impending crisis or a serious
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debate in the country. In fact, in most such cases it is the line ministry that is questioned, and
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not the regulator. Such misperception enables the line ministry to interfere in the functioning of
the regulatory body.
As mentioned earlier, legal accountability allows review of a regulator’s specific decisions. It is
important to ensure that the review process does not create a second layer of regulation, as
experienced in the telecom sector. In the telecom sector, the role of the appellate tribunal,
Telecom Disputes Settlement and Appellate Tribunal (TDSAT), is quite wide. The TDSAT and not
the TRAI has been empowered to settle disputes. This division of labour has adversely affected
the performance of the telecom regulator as any issue can be presented as a dispute.
Nevertheless, there are some benefits- judicial review is considered important in guarding
against decisions by a regulatory agency, which falls outside its statutory mandate or fail to
follow established administrative procedures. TDSAT has taken decisions in certain cases where
TRAI has seemingly not followed due process. Appellate powers are also not uniform across
sectors. Unlike TDSAT, the Securities Appellate Tribunal (SAT) can only entertain appeals against
the decisions of the capital market regulator, Securities & Exchange Board of India (SEBI).

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Transparency
It is important to have a transparent regulatory process. The regulatory process must
incorporate some crucial steps to ensure transparency. For example, stakeholders must be
made aware of the regulatory process and should be given opportunities to present their views
freely. In certain cases, regulatory legislation in India has made provisions to guarantee a
transparent regulatory process. For example, in the electricity and telecom sectors, it has been
mandated that regulators should ensure transparency while exercising their powers and
discharging functions. In the case of Tariff Authority for Major ports (TAMP), no specific
provisions regarding transparency exist in the legislation. However, TAMP has attempted to
introduce transparency through guidelines. No provision in regard to transparency exists in the
Competition Act, but a provision does exist in the general governance principles expounded by
the government. Furthermore, the Right to Information (RTI) Act empowers citizens to seek
information on any matter from any government department or undertaking.

Important Regulatory Bodies

Some important regulatory bodies and their powers and functions are listed below. This is not
an exhaustive list and only important bodies have been listed.
Securities and Exchange Board of India
The Securities and Exchange Board of India (SEBI) is the regulator for securities market in India.
It was established on 12th April 1992 through the SEBI Act, 1992. SEBI has to be responsive to
the needs of three groups, which constitute the market: the issuers of securities; the investors;
the market intermediaries.
(a) Powers
For the discharge of its functions efficiently, SEBI has been vested with the following powers:
•
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To approve by-laws of stock exchanges

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• To require the stock exchanges to amend their by-laws.

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• Inspect the books of accounts and call for periodical returns from recognized stock
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exchanges.
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• Inspect the books of accounts of financial intermediaries.

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• Compel certain companies to list their shares in one or more stock exchanges.
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• Levy fees and other charges on the intermediaries for performing its functions.
• Grant license to any person for the purpose of dealing in certain areas.
• Delegate powers exercisable by it.
• Prosecute and judge directly the violation of certain provisions of the companies
Act.
• Power to impose monetary penalties.
(b) An Appraisal
Successful cases of grievance redressal by SEBI have been rising rapidly. However, a survey
shows that most of the investors find the redresser ineffective. Moreover, SEBI is not able to do
much about ‘fly by night’ or ‘sign-board’ companies who vanish after collecting huge money.
SEBI has been too busy in framing rules and regulation giving rise to complex and cumbersome
framework, which leaves scope for discretionary interpretation. It failed to punish those who
caused abnormal fluctuations in the market. Due to this, small investors are losing confidence in

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investing. The autonomy of SEBI has been compromised as it, more or less, functions as a
branch of the Union Finance Ministry.
Insurance Regulatory and Development Authority
Insurance Regulatory and Development Authority (IRDA) is an autonomous apex statutory
body, which regulates and develops the insurance industry in India. It was constituted by
Insurance Regulatory and Development Authority Act, 1999.
(a) Powers and functions
• Issue to the applicant a certificate of registration and suspend or cancel such
registration;
• Protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts of insurance;
• Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
• Promoting efficiency in the conduct of insurance business;
• Calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries
and other organizations connected with the insurance business;
• Control and regulation of the rates, advantages, terms and conditions that may be
offered by insurers in respect of general insurance business not so controlled and
regulated by the Tariff Advisory Committee;
• Regulating investment of funds by insurance companies;
• Adjudication of disputes between insurers and intermediaries or insurance
intermediaries.
Competition Commission of India
Competition Commission of India is a body of the Government of India responsible for
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enforcing the Competition Act, 2002 throughout India and to prevent activities that have an
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adverse effect on competition in India. The Competition Act, 2002, as amended by the
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Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws. The
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Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and

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regulates combinations (acquisition, acquiring of control and Merger and acquisition), which
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causes or are likely to cause an appreciable adverse effect on competition within India.
(a) Function and Responsibilities
• Make the markets work for the benefit and welfare of consumers.
• Ensure fair and healthy competition in economic activities in the country for faster and
inclusive growth and development of economy.
• Implement competition policies with an aim to effectuate the most efficient utilization
of economic resources.
• Develop and nurture effective relations and interactions with sectoral regulators to
ensure smooth alignment of sectoral regulatory laws in tandem with the competition
law.
• Effectively carry out competition advocacy and spread the information on benefits of
competition among all stakeholders to establish and nurture competition culture in
Indian economy.

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Telecom Regulatory Authority of India (TRAI)

The Telecom Regulatory Authority of India (TRAI) is the independent regulator of
the telecommunications business in India.
(a) Powers and Functions
• Recommend the need and timing for introduction of new service provider;
• Recommend the terms and conditions of licence to a service provider;
• Ensure technical compatibility and effective inter-connection between different service
providers;
• Ensure compliance of terms and conditions of licence;
• Facilitate competition and promote efficiency in the operation of telecommunication
services so as to facilitate growth in such services;
• Protect the interest of the consumers of telecommunication service;
• Inspect the equipment used in the network and recommend the type of equipment to
be used by the service providers;
• Settle disputes between service providers.
Interaction between Policy Makers and Regulators and its Current Status
The role of regulator is to achieve predetermined policy objectives and maintain competitive
conditions in the market by ensuring that everyone follows the basic rules of the game. On the
other hand, the role of policy makers is to provide long-term objectives and vision to the
development of a country. Policy makers issue policy guidelines, which set out national
priorities for sustainable development of sectors and measures for servicing disadvantaged
areas of the country or sections of consumers. However, while in theory policy makers and
regulators have distinctly different roles, in reality the regulator and policy makers share
common responsibilities – ensuring orderly and sustained growth of the sector, attracting
private investment, enhancing consumer protection and so on. Given that regulatory bodies
are often created to achieve predetermined policy objectives, an absolute divorce between the
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two is not desirable and proper interaction between them becomes very important.
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At the same time, it is equally important to ensure that the regulator’s domain is not
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encroached upon by the government in the name of achieving policy objectives. This calls for
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creating a clear distinction between policy and regulation, which is often missing in India. The
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government has not made a policy decision to clearly specify the role of sector regulatory
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bodies, the degree of independence these should have, their accountability and so on. As a
result, when the need arises, the concerned ministry drafts a Bill as per its convenience to
change regulatory mandates. The resulting insecurity implies that regulators often work as an
extension to the office of the ministry. Lack of interaction of the regulator with the policy maker
resulting in confusion regarding respective domains coupled with inadequate empowerment
has made regulators ineffective. To cite a case, the Department of Telecommunications (DoT)
announced certain proposals (on Access Deficit Charges, one India call rate and inter-
connection usage charges) to restructure the tariff regime in telecommunications, considering
these to be policy issues. However, the sector regulator, TRAI, objected to these proposals. The
manner of consultations between the RBI and the Ministry of Finance is a good model: the RBI
holds consultations with the latter on a regular basis, at formal and informal levels, without
compromising its autonomy.

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Participation of Stakeholders in the Regulatory Process

Sector growth should be the common objective of the government as well as the regulator.
However, this is often forgotten. For the orderly growth of a sector, a regular consultation
among the industry, the government, the regulators and other stakeholders such as consumers
is essential. A mechanism for periodic meetings involving these can help the regulator
understand stakeholder problems and concerns. Such forums also enable the regulator to
explain the rationale of various regulatory decisions. However, not much thought has been
given by most regulators to ensuring a representative consultative process. There is another
very important reason for having a representative regulatory process. In India, regulatory
reforms, which have accompanied economic reforms, have been marked by lack of consumer
participation. Consumers, being largely unorganised, have been largely bypassed by the reform
process (except in a few cases where consumer concerns have been highlighted by the media),
which has been influenced by a strong business lobby.
In India, a few sector regulators such as Central Electricity Regulatory Commission (CERC) and
TRAI have created participation mechanisms by constituting Advisory Committees with
representation from consumers and other stakeholders. The participation of stakeholders,
particularly consumers, can be made very effective through well designed and implemented
public meetings along with distribution of accessible literature. In addition to lack of proper
consultation, there is lack of coordination between regulators and government departments,
responsible for formulating and implementing investment related policies. Clear information
may empower stakeholders and can inform the decision-making process. However, such
information should be taken into account by the regulator while making decisions. This can be
ensured through accurate documentation of consultations and recourse to effective legal action
against the regulator to redress bad decisions.
Competition Authority vs. Sector Regulators
To strengthen the forces of competition in the market, both competition law and policy (to be
enforced by Competition Commission) and market regulatory laws (to be enforced by the
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regulator) are required. These complement each other. The difference between the two forms
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of intervention in the market process lies in their nature. A regulator tells the firms what these
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have to do. A regulator examines issues of technology, cost and process in the industry
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regulated by it. Competition Authority, on the contrary, tells the firms what they should not do
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i.e. price fixing, predatory pricing, cartels, discriminatory treatment etc. The role of the
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Competition Authority is that of an adjudicator, which acts against anti-competitive practices.

The separation between the ex-ante functions (the regulator’s domain) and adjudicatory
functions is not perfect and therefore characterized by confusion and disputes in regard to turf.
Further, a sector regulator has a narrow focus, whereas the competition authority has an
economy wide remit. The differences in domain also result in differences in views and create
tensions between the competition authority and the sector regulator. Not only is there a need
to encourage cooperation between the competition authority and sector regulators, there is a
need to review the formally legislated working arrangements between the sector regulators
and the competition authority to ensure coordination and avoid conflicts of jurisdiction and
needless turf battles.
Consumer Redress
A redressal mechanism is an essential component of the competition legislation of any country.
In India too, the MRTPA (Monopolies and Restrictive Trade Practices Act) has inbuilt grievance

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redressal provisions. However, over the years, because of factors like inadequate budgetary
allocation and lack of autonomy the MRTPC (the predecessor of CCI governed by MRTPA) has
not been very effective in providing redress and consequently pending cases have kept piling
up. The CCI is expected to serve consumers better in terms of redress. In addition to the
above, some sector regulators such as telecom, electricity and insurance also have redressal
mechanisms: generic complaint redress by TRAI, telephone adalats (courts), grievance redressal
mechanisms of State Electricity Commissions, the consumer grievance redress cell of the
Insurance Regulatory Development Authority (IRDA), insurance ombudsman, banking
ombudsman etc.
Regulatory Coherence
A robust overarching regulatory philosophy/framework is needed for coordinated development
of the economy and its constituent sectors. However, the evolution of regulatory institutions in
India is not guided by a common philosophy. Political constraints and government preferences
seem to have dominated the reform agenda.
More than twenty years of independent regulation in India have been characterized by the
government’s inability to create and follow a cogent and coherent approach to independent
regulation. At the state level, Bureau of Industrial Promotion (BIP) works as a nodal agency to
provide regulatory coherence, i.e. it is the nodal agency for expediting clearance of private
sector projects. Being a nodal agency, it interacts with all the regulatory bodies at the state level
and tries to ensure coherence among them. But in practice it has not been very effective.
Overall regulatory coherence may be improved by making the following institutional
arrangements:
• Sector specific apex bodies need to be established at the Centre. These bodies should
be complemented by a well-endowed economy wide regulatory and competition
authority in each state.
• An appellate tribunal for all appeals against sector regulators needs to be established. If
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the workload increases in any one sector, these can be hived off.
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• Interface between regulators and the Competition Commission needs to be formalized

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in legal terms so that there is no conflict between them and impugned parties do not
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take advantage of the same.

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• Multi-stakeholder participation should be the way forward, which can effectively take
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care of several concerns with regard to regulatory efficacy and accountability.

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Consumer organizations need to be strengthened with resources so that they can be

effective advocates.
Future Course of Action
The government is planning to bring following reforms in the institutional framework of
regulatory commissions, their role, functions and relationship with the executive and
legislature, their interface with markets and people, and processes and methods of regulation
including rule making and dispute resolution:
• Empowering all regulators to make and enforce regulations, issue licenses and impose
punitive measures including suspension or cancellation of licenses; and set
performance standards and determine tariffs.
• Ensuring independence of regulatory bodies: the government is planning to make the
selection process transparent and shorn of interference.

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• Fixing the tenure of members: The government is considering stipulation of a uniform

tenure of four years for members of all regulatory bodies. Further, to attract quality
personnel and enrich the functioning of the regulatory body, remuneration would be
enhanced and a provision for having a non-governmental representative, such as an
academician or a lawyer, as a member would be included.
• Reducing the overlap of jurisdiction between the CCI and regulators; the government is
planning to define a workable division of labour and increase the interface between the
two, which at present is minimal.
• Introducing multi-sector regulators: The government is contemplating the
establishment of multi-sector regulators for (i) communications; (ii) transport; and (iii)
electricity, fuels and gas. This would eliminate proliferation of regulatory commissions,
help build capacity and expertise, promote consistency of approach and save on costs.
At the State level, a single regulatory commission for all infrastructure sectors may be
more productive and cost effective. States should be encouraged to consider this
approach and the scope of their existing electricity regulators could be extended to
other sectors.
• Constituting appellate tribunals on the lines of telecom and electricity appellate
tribunals. Another approach under consideration is the constitution of a single
appellate tribunal with regional benches for all regulatory commissions.

3] Fiscal Sector Legislative Reforms Commission (FSLRC)

The Financial Sector Legislative Reforms Commission (FSLRC), constituted by the Ministry of
Finance in March 2011, was asked to comprehensively review and redraw the legislations
governing India’s financial system. A former judge of the Supreme Court, Shri B.N. Srikrishna,
chaired the Commission. According to FSLRC, the current regulatory architecture is fragmented
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and is fraught with regulatory gaps, overlaps, inconsistencies and arbitrage. To address this, the
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FSLRC submitted its report to the Ministry of Finance on March 22, 2013, containing an analysis
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of the current regulatory architecture and a draft Indian Financial Code to replace bulk of the
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existing financial laws.

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With respect to regulators, FSLRC stresses the need for both independence and accountability.
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The draft Indian Financial Code adopts ownership neutrality, whereby the regulatory and
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supervisory treatment of a financial firm is the same, whether it is a private or public company.
The draft Code seeks to move away from the current sector-wise regulation to a system, where
the RBI regulates the banking and payments system and a Unified Financial Agency subsumes
existing regulators like SEBI, IRDA, PFRDA and FMC, to regulate the rest of the financial markets.
Regulators will have an empowered board with a precise selection-cum-search process for
appointment of members. The members of a regulatory board can be divided into four
categories: the chairperson, executive members, non-executive members and Government
nominees. In addition, there is a general framework for establishing advisory councils to
support the board. All regulatory agencies will be funded completely by fees charged to the
financial system. Finally, the FSLRC envisages a unified Financial Sector Appellate Tribunal
(FSAT), subsuming the existing Securities Appellate Tribunal (SAT), to hear all appeals in finance.
The table below provides an outline of the FSLRC’s proposed regulatory architecture.

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Present Proposed Functions

RBI RBI Monetary policy; regulation and
supervision of banks; regulation and
supervision of payments system.
SEBI Unified Financial Agency Regulation and supervision of all non-
(UFA) bank and payments related markets.
FMC
IRDA
PFRDA
Securities Appellate Financial Sector Hear appeals against RBI, the UFA and
Tribunal (SAT) Appellate Tribunal FRA.
(FSAT)
Deposit Insurance Resolution Corporation Resolution work across the entire
and Credit financial system.
Guarantee
Corporation (DICGC)
Financial Stability FSDC Statutory agency for systemic risk and
Development development.
Council (FSDC)

New entities Debt Management An independent debt management

Agency agency.
Financial Redressal Consumer Complaints
Agency (FRA)
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Comments Relating to Independence of Regulatory Bodies

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There are four arguments in favour of independence:

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• The regulator is able to set up a specialized workforce that has superior technical
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knowledge.
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•
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• This is assisted by modified human resource and other processes, when compared with the
functioning of mainstream government departments.
• With such knowledge, and close observation of the industry, an independent regulator is
able to move rapidly in modifying regulations, thus giving malleability to laws.
• The presence of independent regulators improves legal certainty.
Recommendation with Regards to Accountability
• Avoid conflicting objectives: This problem is heightened when there are conflicts of
interest. It is, hence, desirable to structure regulatory bodies with clarity of purpose and
the absence of conflicting objectives.
• A well structured rule-making process: To ensure that the benefits of the regulations out
weigh the costs, for every proposed regulation there should be:
o A compact statement of the objects and reasons of the subordinate legislation;

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o
A description of the market outcome, which is an inefficient one (“a market failure” in
Economics parlance);
o Demonstration that solving this market failure is within the objectives of the
regulator;
o Clear and precise exposition of the proposed intervention;
o Demonstration that the proposed intervention is within the powers of the regulator;
o Demonstration that the proposed intervention would address the identified market
failure;
o Demonstration that the costs to society through complying with the intervention are
outweighed by the gains to society from addressing the market failure.
• The Rule of Law: A crucial element of accountability and independence of regulators is
three core principles of the rule of law:
o Laws should be known before an action takes place.
o Laws should be applied uniformly across similar situations.
o Every application of law should provide the private party with the information for
application of the law, the reasoning by which the conclusion was arrived at, and a
mechanism for appeal.
• Reporting: Once the objectives of an agency have been defined, it is meaningful to ask the
agency to report – e.g. in the Annual Report – the extent to which it has achieved these
objectives. Each agency should report on how it has fared on pursuing its desired
outcomes, and at what cost.

4] Recommendations of 2nd ARC

In the 12th report titled, “Citizen Centric Administration”, the 2nd ARC noted:
i. Regulation only where necessary: It has been argued that India is an over-
regulated country, but many of the regulations are not implemented in right
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earnest. The reasons include – (a) the sheer number of such regulations; (b)
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outdated regulations that continue to remain on the statute book; (c) the tendency
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to over-legislate, as a result the legislation becomes an end in itself; and (d) the
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complex procedural formalities stipulated in these regulations. It is, therefore,

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necessary to have a detailed scrutiny of all laws and regulations – Union, State and
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Local – followed by repeal of unnecessary regulations, updation of outdated ones

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and simplification of the procedures so that compliance becomes easy.

ii. Regulation to be effective: One of the consequences of a large number of
regulations has been the poor standards of their enforcement. Social legislations
are a classic example of this. Slack enforcement leads to corrupt and unethical
practices and the objectives of the legislations are also not met. Another reason for
the poor enforcement of some regulations is the lack of attention to building
capacity in the agencies entrusted with enforcement of such regulations. For
example, the capacity and expertise of the Motor Vehicles Department has not kept
pace with the explosive growth of vehicles on the road. The Commission
recommended that in order to ensure that the regulatory measures do not
degenerate into corrupt practices it is necessary to have an effective supervision of
the agencies, which carry out these regulatory functions. This supervision should
primarily be carried out internally by the supervisory officers and should be
supplemented by a periodic assessment by an independent agency.

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iii. Self-regulation is the best form of regulation: In the field of taxation, there has
been a shift from departmental assessment to greater reliance on self-assessment.
This holds good for Union taxes such as Income tax, State taxes like the VAT and
local taxes like the property taxes. This principle of voluntary compliance can be
extended to other fields like building bye-laws, public health regulations etc. To
start with, this principle can straightaway be applied to cases where
permission/license is required to be renewed periodically.
iv. Regulatory procedures to be simple, transparent and citizen friendly: There
should be systemic reforms so as to minimize the scope for corruption. These
include simplifying transactions, using IT, promoting transparency, reducing
discretion, effective supervision etc.
v. Involving citizens’ groups, professional organizations in the regulation activities.
The burden of the enforcement machinery can be shared by associating citizens’
groups as well as professional organizations to certify compliance and report
violations of the regulations to the concerned authorities. Recently, in Delhi the
procedure for grant of building permissions has been simplified and registered
architects have been authorized to certify the building plans of houses. This has
helped in reducing the work of the civic agencies and reduced corruption as well.
This principle could be also extended to other spheres of activities.
In the 13th report of 2nd ARC, following steps have been proposed to improve the working of
independent regulators:
a. Setting up of a Regulator should be preceded by a detailed review to decide whether
the policy regime in the concerned sector is such that the Regulator would be better
placed to deliver the policy objectives of the department concerned.
b. In addition to the statutory framework, which underpins the interface between the
government and the regulator, each Ministry/Department should evolve a
‘Management Statement’ outlining the objectives and roles of each regulator and the
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guidelines governing their interaction with the government. This would guide both the
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government department and the Regulator.

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c. There is need for greater uniformity in the terms of appointment, tenure and removal
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of various regulatory authorities considering these have been set up with broadly
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similar objectives and functions and should enjoy the same degree of autonomy. The
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initial process of appointment of Chairman and Board Members should be transparent,

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credible and fair.

d. The appointment of the Chairman and Board Members for all such regulatory
authorities should be done by the Union/State Governments after an initial screening
and recommendation of a panel of names by a Selection Committee. The composition
of the Selection Committee should be defined in the respective Acts and may broadly
follow the pattern laid down in the Electricity Regulatory Commission Act.
e. The tenure of the Chairman and Board Members could also be made uniform,
preferably three years or 65 years of age, whichever is earlier.
f. Legal provisions regarding removal of Board Members should be made uniform, while
at the same time ensuring sufficient safeguards against arbitrary removal. This could be
achieved by allowing removal by the Union Government only on fulfillment of certain
conditions as laid down in Section 6 of the IRDA Act with the additional safeguard that a
removal for abuse of power shall be preceded by an enquiry and consultation with
UPSC.

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g. Parliamentary oversight of regulators should be ensured through the respective

Departmentally Related Standing Parliamentary Committees.
h. A body of reputed outside experts should propose guidelines for periodic evaluation of
the independent Regulators. Based on these guidelines, government in consultation
with respective Departmentally related Standing Committee of the Parliament should
fix the principles on which the Regulators should be evaluated. The annual reports of
the regulators should include a report on their performance in the context of these
principles. This report should be referred to the respective Parliamentary Committee
for discussion.
i. Each statute creating a Regulator should include a provision for an impact assessment
periodically by an external agency. Once the objective of creating a level playing field is
achieved, the intervention of the Regulators could be reduced in a phased manner
ultimately leading either to their abolition or to convergence with other Regulators.
j. There is need to achieve greater uniformity in the structure of Regulators.
k. The existing coordination mechanisms such as the Committee of Secretaries/Cabinet
Committees, assisted by Secretary (Coordination) could easily ensure that the
institutional framework for all Regulators follow, by and large, a uniform pattern.

5] Single Super-Regulator vs. Multiple Regulators

Arguments in favor of Unified Supervision
• Fragmented supervision may raise concerns about the ability of the financial sector
supervisors to form an overall risk assessment of the institution, operating domestically
and often internationally, on a consolidated basis, as well as their ability to ensure that
supervision is seamless and free of gaps. There are also group-wide risks that may not
be adequately addressed by specialist regulators.
• As the lines of demarcation between products and institutions have blurred, different
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regulators could set different regulations for the same activity for different players.
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Unified supervision could thus help achieve competitive neutrality. (IRDA and SEBI
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collision on ULIPs)
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• The unified approach allows for the development of regulatory arrangements that are
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more flexible. Whereas the effectiveness of a system of separate agencies can be

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impeded by ‘turf wars’ or a desire to ‘pass the buck’ or where respective enabling
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statutes leave doubts about their jurisdiction, these problems can be more easily
limited and controlled in a unified organization. (example NSEL crisis)
• Unified supervision could generate economies of scale as a larger organization permits
finer specialization of labor and a more intensive utilization of inputs and unification
may permit cost savings on the basis of shared infrastructure, administration, and
support systems. Unification may also permit the acquisition of information
technologies, which become cost-effective only beyond a certain scale of operations
and can avoid wasteful duplication of research and information-gathering efforts.
• A final argument in favor of unification is that it improves the accountability of
regulation. Under a system of multiple regulatory agencies, it may be more difficult to
hold regulators to account for their performance against their statutory objectives, for
the costs of regulation, for their disciplinary policies, and for regulatory failures.

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Arguments against Unified Regulation

A number of important countries continue to persist with multiple regulators, though
regulatory co-ordination has been increasing everywhere. The US, for example, has adopted a
model, which blends functional regulation with umbrella supervision. For over 60 years,
regulation of financial institutions in the US was divided among several different agencies. The
Gramm-Leach-Bliley Act, enacted in November 1999, adheres to the principle of functional
regulation whereby the primary regulators of insurance companies, investment companies and
banks continue to be specialist regulators as earlier. However, the Federal Reserve Board is now
entrusted with the role of the umbrella supervisor to regulate the financial holding companies
subject to some limitations, which are collectively referred to as Fed-Lite provisions.
The persistence of separate regulators in most economies reflects the fact that there are
equally compelling arguments against unified supervision. This includes:
• Given the diversity of objectives – ranging from guarding against systemic risk to
protecting the individual consumer from fraud – it is possible that a single regulator
might not have a clear focus on the objectives and rationale of regulation and might not
be able to adequately differentiate between different types of institutions.
• A single unified regulator may also suffer from some diseconomies of scale. One source
of inefficiency could arise because a unified agency is effectively a regulatory monopoly,
which may give rise to the type of inefficiencies usually associated with monopolies. A
particular concern about a monopoly regulator is that its functions could be more rigid
and bureaucratic than these separate specialized agencies. It is argued that another
source of diseconomies of scale is the tendency for unified agencies to be assigned an
ever-increasing range of functions; sometimes called ‘Christmas-tree effect’.
• Some critics argue that the synergy gains from unification will not be very large, i.e.
economies of scope are likely to be much less significant than economies of scale. The
cultures, focus, and skills of the various supervisors vary markedly. For example, it has
been argued that the sources of risks at banks are on the asset side, while most of the
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risks at insurance companies are on the liability side.

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• The public could tend to assume that all creditors of institutions supervised by a given
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supervisor will receive equal protection, generating ‘moral hazard’. Hence depositors
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and perhaps other creditors of all other financial institutions supervised by the same
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regulatory authority may expect to be treated in an equivalent manner.

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• Another serious disadvantage of a decision to create a unified supervisory agency can

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be the unpredictability of the change process itself. The first risk is that opening the
issue for discussion will set in place a chain of events that will lead to the creation of a
unified agency, whether or not it is appropriate to create. The second risk is legislation
in that the creation of a unified agency will generally require new legislation, but this
creates the possibility that the process will be exploited by special interests. The third
risk is a possible reduction in regulating capacity through the loss of key personnel.
Another risk is that the management process itself will go off track.

6] Enforcement Directorate
Directorate of Enforcement is a multi-disciplinary organization mandated with the task of
enforcing the provisions of two special fiscal laws – Foreign Exchange Management Act, 1999
(FEMA) and Prevention of Money Laundering Act, 2002 (PMLA). The Directorate of

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Enforcement, with its Headquarters at New Delhi is headed by the Director of Enforcement.
There are five Regional offices at Mumbai, Chennai, Chandigarh, Kolkata and Delhi headed by
Special Directors of Enforcement. There are zonal offices headed by the Joint Directors and sub-
zonal offices headed by Deputy Directors.
Besides directly recruiting personnel, the Directorate also draws officers from different
Investigating Agencies, viz., Customs & Central Excise, Income Tax, Police, etc. on deputation.
Origin and Evolution
The origin of this Directorate goes back to 1st May, 1956, when an ‘Enforcement Unit’ was
formed, in Department of Economic Affairs, for handling Exchange Control Laws violations
under Foreign Exchange Regulation Act, 1947 (FERA ’47). This Unit was headed by a Legal
Service Officer, as Director of Enforcement with Headquarter at New Delhi and two branches at
Bombay and Calcutta.
In the year 1957, this Unit was renamed as ‘Enforcement Directorate’, and another branch was
opened at Madras. The administrative control of the Directorate was transferred from
Department of Economic Affairs to Department of Revenue in 1960. With the passage of time,
FERA’47 was repealed and replaced by FERA, 1973. For a short period of 04 years (1973 –
1977), the Directorate remained under the administrative jurisdiction of Department of
Personnel & Administrative Reforms.
With the onset of the process of economic liberalization, FERA, 1973, which was a regulatory
law was repealed and in its place, effective 1st June, 2000, a new law – Foreign Exchange
Management Act, 1999 (FEMA) came into operation. Further, in tune with the International
Anti Money Laundering regime, Prevention of Money Laundering Act, 2002 (PMLA) was
enacted, and entrusted for its enforcement to the Directorate.
Carved in the role of a multi-dimensional organization, the Directorate enforces two laws:
i. FEMA, a Civil Law having quasi-judicial powers, for investigating suspected
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contraventions of the Exchange Control Laws and Regulations with the powers to
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impose penalties on those adjudged guilty; and

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ii. PMLA, a Criminal Law, whereby the Officers are empowered to conduct enquiries to
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locate, provisionally attach/confiscate assets derived from acts of Schedules Offences,

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besides arresting and prosecuting the Money Launderers.

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Functions
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The main functions of the Directorate are as under:

1. Investigate contraventions of the provisions of Foreign Exchange Management Act,
1999(FEMA). Contraventions of FEMA are dealt with by way of adjudication by
designated authorities of ED and penalties up to three times the sum involved can be
imposed.
2. Investigate offences of money laundering under the provisions of Prevention of Money
Laundering Act, 2002(PMLA) and to take actions of attachment and confiscation of
property if the same is determined to be proceeds of crime derived from a Scheduled
Offence under PMLA, and to prosecute the persons involved in the offence of money
laundering. There are 156 offences under 28 statutes, which are Scheduled Offences
under PMLA.

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 Student Notes:

3. Sponsor cases of preventive detention under Conservation of Foreign Exchange and

Prevention of Smuggling Activities Act, 1974(COFEPOSA) in regard to contraventions of
FEMA.
4. Render cooperation to foreign countries in matters relating to money laundering and
restitution of assets under the provisions of PMLA and to seek cooperation in such
matters.

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