MP INSTITUTE OF IAS

Governance Module 1
Syllabus Overview
Important aspects of governance, transparency and accountability,e-
governanceapplications, models, successes, limitations, and potential; citizens
charters, transparency & accountability and institutional and other measures.
Role of civil services in a democracy

Scanning the Mark distribution

Year 2013 2014 2015 2016 2017 2018 2019 2020 2021
Marks 20 0 25 50 25 25

Previous Year Question

2018
1. The Citizen’s Charter is an ideal instrument of organisational transparency
and accountability, but it has its own limitations. Identify the limitations and
suggest measures for greater effectiveness of the Citizen’s Charters. ( 250
words, 15 marks )
2. E-governance in not only about utilization of the power of new technology,
but also much about critical importance of the ‘use value’ of information.
Explain.(150 words,10 marks)
2017
1. Discuss the role of Public Accounts Committee in establishing
accountability of the government to the people. (150 words, 10 marks)
2. 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 (250 words, 15 marks)
2016
1. “Effectiveness of the government system at various levels and people’s
participation in the governance system are inter-dependent.” Discuss

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their relationship with each other in context of India. (200 words, 12.5
marks)
2. “Traditional bureaucratic structure and culture have hampered the
process of socioeconomic development in India.” Comment. (200 words,
12.5 marks)
3. “In the Indian governance system, the role of non-state actors has been
only marginal.” Critically examine this statement. (200 words, 12.5
marks)
4. “Traditional bureaucratic structure and culture have hampered the
process of socioeconomic development in India.” Comment. (200 words,
12.5 marks)
2015
1. In the light of the Satyam Scandal (2009), discuss the changes brought in
corporate governance to ensure transparency, accountability. (200
words, 12.5 marks)
2. “If amendment bill to the Whistleblowers Act, 2011 tabled in the
Parliament is passed, there may be no one left to protect.” Critically
evaluate. (200 words, 12.5 marks)

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What is Governance?
Governance is the process through which state and non-state
actors interact to design and implement policies within a given set
of formal and informal rules that shape and are shaped by power.
(World Development Report 2017)

Creating a favourable political

,legal and economic environment
State

Civil
Market
society
Creating opportunities for
people
Mobilizing peoples
participation

Good Governance
• The governance mechanism which is necessary for creating
and sustaining an environment which fosters strong and equitable
development

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Why good governance?
• Increasing trust and confidence of people in democracy
• Proactive response from bureaucrats and legislators
• Reflect the mandate and interests of people
• Ethical decision making

Examples of Good Governance Initiatives in India

• 73rd and 74th Constitutional Amendments (1992) provided for the
participation of people in the governance process.
• Sevottam model
• Rights-related statutory bodies such as the National Commission for Women
(1992), the
• National Commission for Minorities (1993), the National Human Rights
Commission (1993)
• Niti Aayog proposal for lateral entry into middle rung of civil services

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• Laws were enacted giving certain rights to people like the Protection of
Women from
• Domestic Violence Act (2005), the Scheduled Tribes and Other Traditional
Forest Dwellers (Recognition of Forest Rights) Act (2006)

Barriers to Good Governance

1. Attitudinal Problems of the Civil Servants- growing concern that the Civil
Services and administration have become inflexible, self-perpetuating and
inward looking.
2. Lack of Accountability- inefficiency in governance is the inability within the
system to hold the Civil Services accountable for their actions.
3. Red Tapism-Government servants becomes overly pre-occupied with rules
and procedures and view these as an end in themselves
4. Low Levels of Awareness of the Rights and Duties of Citizens-Inadequate
awareness about their rights prevents citizens from holding erring government
servants to account.
5. Ineffective Implementation of Laws and Rules-There is a large body of laws
in the country but weak implementation can cause a great deal of hardship .
In order to ensure good governance, it is imperative that the administration
becomes more citizen centric.

How to create citizen centric governance mechanism?

• Sound legal framework.
• Robust institutional mechanism for proper implementation of the laws and
their effective functioning.
• Competent workforce and sound personnel management policies.
• Decentralization and delegation- principle of subsidiarity
• Transparency and right to information
• Accountability

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• Focus on outcomes- evaluation and monitoring
• Grievance rederessal mechanisms
• Demystifying government processes
• Active citizen participation- Information dissemination and stakeholder
consultation
These measures would make the institutions more vibrant and responsive
while ensuring the confidence and trust of the commons in the democratic
framework of the nation.

Transparency and Accountability

Over the last few decades, transparency and accountability have become the
mantra for addressing the developmental failures and democratic deficits.

Accountability refers to the process of holding actors responsible

for their actions.
Accountability ideally involves both answerability – the
responsibility of duty-bearers to provide information and
justification about their actions – and enforceability – the possibility
of penalties or consequences for failing to answer accountability
claims.
Transparency refers to the availability of information to the general public
and clarity about government rules, regulations, and decisions.

Initiatives of Transparency and Accountability

Anti-corruption machinery
Corruption is most commonly defined as the misuse or the abuse of public
office for private gain. Corruption has so widely engulfed all the sections of
society that it seems an uphill task to root it out from the country.
In India corruption is mainly of two types at various levels
1. Coercive corruption at lower level of bureaucracy – citizen is forced to give
bribes for availing services

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2. Collusive corruption at higher echelons- where both bribe giver and taker
are benefitted

Causes of corruption
• Colonial legacy of unchallenged authority and propensity to exercise power
arbitrarily
• Asymmetric power relations in the society
• Post independent policies- over-regulation, restricted economic activity,
state monopolies
• Absence of code of conduct for civil servants
• Tolerance of people towards corruption

How to address corruption?

a. Legal Framework

Prevention of Corruption (Amendment) Act, 2018

Introduced to amend the PCA 1988 and strengthen the provisions

governing the anti-corruption machinery.

Key Amendments

• Proposes more stringent punishment for the offences of bribery, both

for the bribe giver and the bribe taker.
• Enhances punishment from the minimum 6 months to 3 years and
from the maximum five years to seven years.
• Extends the protection of prior sanction for prosecution to public
servants who cease to hold office due to retirement and resignation.
• Powers and procedures for the attachment and forfeiture of property
of public servants accused of corruption
• Central government to prescribe guidelines about adequate
procedures that commercial organisations must put in place to prevent
persons associated with them from bribing a public servant

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• Non-monetary gratification is also be covered within the definition of
the word gratification in the PCA 1988.
• The total period for completion of trial must not exceed four years

Issues with the Act

• The Bill makes giving a bribe a specific offence. Some have argued that
a coerced bribe giver must be distinguished from a collusive bribe giver.

• The Bill has deleted the provision that protects a bribe giver from
prosecution, for any statement made by him during a corruption trial.

• The Bill has replaced the definition of criminal misconduct. It now

requires that the intention to acquire assets disproportionate to income
also be proved, in addition to possession of such assets.

• By redefining the offence of criminal misconduct, the Bill does not

cover circumstances where the public official: (i) uses illegal means, (ii)
abuses his position, or (iii) disregards public interest and obtains a
valuable thing or reward for himself or another person.

Hence there should be greater debate about the various provisions of

the Bill. We must carefully deliberate the provisions of the Bill to ensure
that the delicate balance of punishing those guilty of corruption and
protecting the innocent from harassment is maintained.

Ombudsman

• The office of the ombudsman originated-in Sweden in 1809 and has

been adopted by many nations.
• Ombudsman is a government official who investigates citizens’
complaints against the high government functionaries.
• Though appointed by the legislature he is an independent functionary -
independent of all the three organs of the state, but reports to the
legislature

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The Lokpal and Lokayuktas Act, 2013

An anti-corruption Act of Indian Parliament in India which "seeks to

provide for the establishment of the institution of Lokpal to inquire into
allegations of corruption against certain public functionaries and for
matters connecting them"

The ‘Lokpal’ is the central governing body that has jurisdiction over all
members of parliament and central government employees in case of
corruption.
Lokayukta is similar to Lokpal but works on the State level.

Salient features of the Act

• The Lokpal will consist of a chairperson and a maximum of eight

members
• The Lokpal will cover all categories of public servants, including the
Prime Minister. But the armed forces do not come under the ambit of
Lokpal.
• The Act also incorporates provisions for attachment and confiscation
of property acquired by corrupt means, even while the prosecution is
pending.
• The States will have to institute Lokayukta within one year of the
commencement of the Act.
• Mandatory for public servants to declare their assets and liabilities
along with that of their spouse and dependent children.
• The Lokpal will have the power of superintendence and direction over
any investigation agency including CBI
• An investigation must be completed within six months. However, the
Lokpal or Lokayukta may allow extensions of six months

Concerns with the Act

• States are free to define how their own Lokayuktas- composition and
jurisdiction
• Judiciary not subject to Lokpal jurisdiction
• No adequate provisions to appeal against the Lokpal.

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• No protection to whistleblowers
• Diluting the stringent conditions on declaration of assets by public
servants

Whistle blowers

A whistle blower is a person who exposes any kind of information or

activity that is deemed illegal, unethical, or not correct within an
organization that is either private or public
Eg: Satyendra Dubey in NHAI’s Golden Quadrilateral project.

Whistle Blowers Protection Act, 2011

• The Act seeks to protect whistle blowers, i.e. persons making a public
interest disclosure related to an act of corruption, misuse of power, or
criminal offense by a public servant.

• Any public servant or any other person including a non-governmental

organization may make such a disclosure to the Central or State
Vigilance Commission.
• Every complaint has to include the identity of the complainant.
• The Vigilance Commission shall not disclose the identity of the
complainant except to the head of the department if he deems it
necessary. The Act penalizes any person who has disclosed the identity
of the complainant.
• The Act prescribes penalties for knowingly making false complaints.

Whistle Blowers Protection Amendment Bill, 2015

• The Bill prohibits the reporting of a corruption related disclosure if it

falls under any 10 categories of information.
• These categories include information related to: (i) economic, scientific
interests and the security of India; (ii) Cabinet proceedings, (iii)
intellectual property; (iv) that received in a fiduciary capacity among
others

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• The Act permits disclosures that are prohibited under the Official
Secrets Act (OSA), 1923. The Bill reverses this to disallow disclosures that
are covered by the OSA.
• Any public interest disclosure received by a Competent Authority will
be referred to a government authorised authority if it falls under any of
the above 10 prohibited categories. This authority will take a decision on
the matter, which will be binding.

Major issues with the Bill

• The RTI Act allows (i) the public authority to disclose information if he
considers it to be in public interest; and (ii) a two stage appeal process if
information is not made available. The Bill does not contain such
provisions.
• A Competent Authority is required to refer a prohibited disclosure to a
government authority for a final decision. However, the Bill does not
specify the minimum qualifications required or the process of
appointment of this authority.
• It covers only government employees. Does not cover private/
corporate whistle blowers.
• There may be no one left to protect- whistle-blowers deaths more
than 30 since 2010

Way forward

• Protection to the whistleblowers

• Defining what constitutes “national security” and reducing the large
number of exemptions
• Bringing Whistleblowers Act in tandem with Lokpal Act
• Expanding the ambit to include private whistleblowers

Genuine concerns over national security must be addressed without

compromising the purpose and strength of the Whistleblowers
Protection Act

b. Ethical framework

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Ethics provides the basis for the creation of such laws and rules.
It is the moral ideas of people that give rise to and shapes the character
of laws and rules. Hence in addition to a strong legal framework, we
need a corresponding ethical framework.

Following principles should become institutionalized in Indian public

life to weed out corruption.

• Codifying ethical norms and practices.

• Disclosing personal interest to avoid conflict between public interest
and personal gain.
• Creating a mechanism for enforcing the relevant codes.
• Providing norms for qualifying and disqualifying a public functionary
from office.

c. Role of Media

A free media has a crucial role in the prevention, monitoring and control
of corruption.
Such media can inform and educate the public on corruption, expose
corruption in government, private sector and civil society organizations
and help monitor codes of conduct

How media can counter corruption?

• Investigative reporting- source of corruption

• Challenging the monopoly of the government over the distribution of
information.
• Collation of reports appearing in different media and their follow up
to be part of complaints monitoring mechanism in all public offices
• Effective checks and balance to ensure transparency
To ensure media works as a democracy watchdog, it is necessary they
have a proper self regulatory mechanism in place for maintaining the highest
form of integrity and standards in news delivery.

d. Other suggested reforms

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• Use of ICT initiatives such as e-procurement, m-governance,
digitization of government records among others
• Adoption of Singapore model-higher incentives to those in lower
bureaucracy
• Strengthening grievance redressal and swift punishments to the guilty
• Electoral reforms like linking Aadhar to voter ID, state funding of
elections, changes in election of CEC, changes in anti-defection and
measures to curb criminalization of politics

Governance Module 2
Right to Information Act, 2005
Objectives of the Act
• To provide for an institutional framework for ensuring the
right to information
• To promote transparency and accountability in the working
for the public authority
• To contain corruption
• To ensure democracy in the real sense

Things to be noted
• 3 Levels - Public Information Officer, First Appellate
Authority, Central Information Commission (CIC).
• Time period for Public Information Officer: Expeditiously
or within 30 days from the date of receipt by public
authority.
• Maximum time gap for Ist appeal: 30 days since limit of
supply of information is expired.
• Time period for Appellate Authority: Within 30 days or in
exceptional cases 45 days from the date of receipt by
public authority.
• Maximum time gap for 2nd appeal: 90 days since limit of
supply of information is expired.

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RTI Amendment Bill, 2019
Provision RTI Act, 2005 RTI RTI (Amendment) Bill,
2019
Term The Chief Information Commissioner (CIC) and The Bill removes this
Information Commissioners (ICs) (at the central provision and states that the
and state level) will hold office for a term of five central government will
years. notify the term of office for
the CIC and the ICs.

salary The salary of the CIC and ICs (at the central The Bill removes these
level) will be equivalent to the salary paid to the provisions and states that
Chief Election Commissioner and Election the salaries, allowances, and
Commissioners, respectively. Similarly, the other terms and conditions
salary of the CIC and ICs (at the state level) will of service of the central and
be equivalent to the salary paid to the Election state CIC and ICs will be
Commissioners and the Chief Secretary to the determined by the central
state government, respectively. government
DeductionsThe Act states that at the time of the The Bill removes these
in salary appointment of the CIC and ICs (at the central provisions.
and state level), if they are receiving pension or
any other retirement benefits for previous
government service, their salaries will be
reduced by an amount equal to the pension.
Previous government service includes service
under: (i) the central government, (ii) state
government, (iii) corporation established under
a central or state law, and (iv) company owned
or controlled by the central or state
government.

Successes of RTI
• Improved transparency and accountability
• Led to the demand of several other equally important rights

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• Participatory governance
• Reduces power asymmetry between government and citizens
• Impetus to digitization of records
• Increased awareness of bureaucratic functioning

Concerns in the Implementation of RTI Act

Demand Side problems
• Complex process of appeal- insistence of demand drafts, no
user guides
• Lack of awareness
• Increasing frivolous RTI applications
• Dilution of supplementary laws - whistle-blower protection

Supply side problems

• Poor record-keeping practices within the bureaucracy
• Issues related to information commissions
• Inadequate budget for implementing RTI requests
• Lack of Proactive declaration of information
• Large exemptions in the Act
• Absence of a well dedicated PIO machinery

Way forward
• Simplifying the procedures related to RTI applications
• Professional cadre of PIOs
• Awareness mechanisms
• Information commissions
• Reduce the exemptions allowed under the Act
• Harmonize the different laws
• Mechanism to address frivolous complaints

Debate of political parties within RTI

Arguments for bringing political parties within RTI
• They are identified as public authorities

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• Important impact on the working of the government
irrespective of the fact that the party is ruling or in opposition.
• Internal democracy and social justice within parties
• Right to information during elections
• Address financial irregularities and crony capitalism

Arguments against political parties under RTI

• Not public authorities as they are not established under any
law or by Constitution
• Affect independent functioning
• Misuse of RTI by rival political parties
• Information already available under the RPA Act
• Absence of infrastructural and institutional mechanisms for
implementation
• Electoral reforms rather than RTI must be the immediate step

Way forward

Citizen Charter
A citizens' charter is a document of commitments made by a
government agency to the citizens respect of the services being
provided to them.
• Objective is to build bridges between citizens and
administration and to streamline administration in tune with
the needs and concerns of citizens
• It empowers the citizens to demand the committed standards
of service
• It is not legally enforceable and hence, non-justiciable.

Salient features of citizen charter

• Quality: Improving the quality of services
• Choice: For the users wherever possible

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• Standards: Specifying what to expect within a time frame and
how to act if standards are not met
• Value: For the taxpayers' money
• Accountability: Of the service provider (individual as well as
an organisation) and
• Transparency: In rules, procedures, schemes and grievances
redressal

Benefits of citizen charter

• Increases organizational effectiveness and performance
• Internal and external accountability
• Responsive administration
• It decreases opportunities for corruption and graft
• Efficient use of public money

Issues facing implementation of Citizen Charter

• The consultation process was minimal or largely absent
• Standards/time norms of services mentioned in Citizens'
Charter were either too lax or too tight
• The staff were not adequately trained and sensitised
• Transfers and reshuffles of concerned officers at the crucial
stages of formulation/implementation
• Absence of review and updation.
• Poor citizen awareness coupled with bureaucratic mind-set
• The concept behind the Citizens' Charter was not properly
understood

How to streamline the Citizen Charter Initiative?

• Extensive consultation with the users
• Quantifiable terms for public services
• Internal restructuring needed in devising citizen charters
• Security of tenure for ensuring long term commitments to
service delivery
• User feedback mechanisms and customer surveys

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• Periodic evaluation
• Ensuring accountability for dereliction of duties

The Right of Citizens for Time Bound Delivery of Goods and

Services and Redressal of their Grievances Bill, 2011
(Status – Lapsed)
• The Bill seeks to create a mechanism to ensure timely delivery
of goods and services to citizens II
• Every public authority is required publish a citizens charter
within six months of the commencement of the Act
• A citizen may file a complaint regarding any grievance related
to: citizens charter: functioning of a public authority: or
violation of a law, policy or scheme.
• The Bill requires all public authorities to appoint officers to
redress grievances. Grievances are to be redressed within
30 working days. The Bill also provides for the appointment
of Central and State Public Grievance Redressal
Commissions.
• A penalty of up to Rs 50,000 may be levied upon the
responsible officer or the Grievance Redressal Officer for failure
to render services

Sevottam
A certification scheme called Sevottam was launched to address
some of the shortcomings of the citizen's charter.
It provides for the award of the Sevottam symbol of excellence to
public service organizations that implements and undertakes a
set of management system requirements.
Three features of Sevottam model:
• Successful implementation of Citizen's Charters
• Service Delivery Preparedness and achievement of Results

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• Sound Public Grlevance Redress Mechanism.

STUDENTS NOTES

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Social Audits
Social audits refer to a legally mandated process where
potential and existing beneficiaries evaluate the
implementation of a programme by comparing official
records with ground realities. The public hearings that social
audits conclude with remain its soul. The proceedings cannot be
scripted, and the entire social audit is often a dramatic process of
redistribution of power based on evidence and fact.
Objectives of Social Audit
• Accurate identification of requirements.
• Prioritization of developmental activities as per requirements
• Proper utilization of funds
• Conformity of the developmental activity with the stated goals
• Quality of service.

Social Audit Cycle

Define values
and objectives
of
organisation

Identify
Publish social
indicators of
audit results
performance

Social Audit
Cycle

Evaluate data- collect data-

Intermal and qualitative
external and
comparisons quantitative

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Need for social audits
• Empowerment and political awareness=> participatory
democracy
• Monitoring required since more than 50% of the
government's budget goes towards welfare schemes Social
audits serve as a better monitoring tool for these schemes.
• Addressing financial irregularities and making common
man aware of governance
• Realize the real spirit of citizen centric governance
Benefits of Social Audit
• Local democracy- decentralization
• Develops human resources and social capital
• Reduction of wastages and corruption
• Awareness among people.
• Collective decision making
• Improves the standard of governance

Why social audits are losing their relevance in recent

times?
• Lack of support from government machineries
• Absence of any legal proceedings for not following social
audit principles.
• Inadequate education among the common masses
• Institutionalization on the ground has been inadequate,
and has faced great resistance from the establishment.

How to strengthen social audit mechanism?

• Institutionalize auditing standards according to the guidelines
laid down by CAG
• Education campaigns especially rural areas
• Social audit committees in each district
• Establishment of a team training social audit experts in each
district who are responsible for
committee members .

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• Commitment, seriousness and clear responsibilities for follow up
actions by elected members of the Gram Panchayat

STUDENTS NOTES

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E-governance Module
Why the need for e-governance?
• Governance complex and citizen expectations have increased
manifold
• ICT facilitates efficient storing and retrieval of data,
instantaneous transmission of information, processing
information and data
• Helps in increasing the reach of government - both
geographically and demographically

What is e-governance?
E-Governance or 'electronic governance' is basically the
application of ICT to the processes of Government functioning in
order to bring about "Simple, Moral, Accountable, Responsive and
Transparent' (SMART) governance.
Benefits of e-governance
ICT-enabled connected governance contributes to:
Internally Externally
1. Avoidance of duplication • Faster service delivery
2. Reducing transaction • Greater efficacy
costs • Increased flexibility of
3. Simplifying bureaucratic service use
procedures • Innovation in service
4. Greater efficiency delivery
5. Greater coordination • Greater participation
and communication • Greater citizen
6. Enhanced transparency empowerment
7. Information sharing • Citizen participation
between agencies
8. Security of information
management

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Applications of E-governance
1. Government to Citizen (G2C) - aim at connecting citizens to
government through single point delivery systems.
Pan Indian examples- e-citizen projects, IRCTC, Passport e-
seva kendras
State specific examples- Bhoomi in Karnataka, FRIENDS in
Kerala, Lokvani in UP

2. .Government to Business (G2B)-connecting the government

to business platforms
Eg: E-biz portal, MCA 21, E-procurement
3. Government to Government (G2G) Initiatives- revamping
the internal governance mechanism by introducing the ICT
initiatives
Pan Indian initiatives- CCTNS, E-Office
State wise examples -Khajane Project in Karnataka and
SmartGov project of Andhra Pradesh

National E-governance Plan,2006

The National e-Governance Plan (NEGP) has been formulated

by the Department of Electronics and Information Technology
(DEITY) and Department of Administrative Reforms and
Public Grievances (DARPG) in 2006. It began with 27 Mission
Mode Projects and ten components.

Vision: "Make all Government services accessible to the

common man in his locality, through common service delivery
outlets and ensure efficiency, transparency & reliability of
such services at affordable costs to realise the basic needs of
the common man."

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M-governance

M-Governance is the use of mobile or wireless to improve

Governance service and information "anytime, anywhere". M-
governance has increased the productivity of public service
personnel. Improving the delivery of government information
and services, increasing channels for public Interactions and
lower costs leading to higher participation of people
Eg: Mobile Seva and Dr. SMS

Digital India (broader than NEGP 2006)

The vision of Digital India programme also aims at inclusive
growth in areas of electronic services,. products,
manufacturing and job opportunities etc. The vision of Digital
India is centred on three key areas
(i) Digital Infrastructure as a Utility to Every Citizen
(ii) Governance & Services on Demand and
(iii) Digital Empowerment of Citizens

Challenges faced by e-governance projects

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Economic challenges
1. Funding issues
2. Accessibility barriers

Social challenges

• Diversity in social space

• Bureaucratic mind-set
• Technological challenges
• Absence of basic network for electricity and roads to ensure
connectivity

Way forward
• Statutory enabling framework for e-governance
• Data protection laws and framework for digital security
 E-preparedness audit for institutional up gradation
• PPP projects preferred route- transparent process and best
practice
• Speedier completion of Bharatnet project
• IEC campaigns to bring about behavioural response

Ultimately, the success of an e-Governance initiative lies in how

efficiently it has enhanced people's participation in government
functioning through wide ICT access, bringing government and
the services it offers closer to its citizens These are the sine qua
non for good governance and a vibrant democracy.

STUDENTS NOTES

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Governance Module 3
Role of Civil Service in Democracy
The Indian Constitution provides for separation of powers between
the legislature, executive and judiciary with well-defined roles and
responsibilities for each one of them. The Constitution separates the
executive into two parts.
i. Civil Servants- Articles 53 and 154 -the executive power of the
Union and the States vests in the President or Governor
directly or through officers subordinate to him.
ii. Political-The President or Governor is required to act
according to the aid and advice of his Council of Ministers,
appointed under Articles 74 and 163 of the Constitution.

Constitutional Provisions Related to Civil Services in India

• Part XIV- Services under the Union and States (Article 308-323)
• Articles 53 and 154- Executive power of Union and State
• Article 309- Recruitment and conditions of service of persons
serving Union or State
• Article 310 – Tenure of office of persons serving the Union or a
State.
• Article 311 – Dismissal, removal or reduction in rank of persons
employed in civil capacities under the Union or a State.
• Article 312 – All India Services.
• Article 315-PSCs for Union and State

Civil Services and Democracy At the heart of democracy lies the

citizen. Civil services as an organization are expected to play a pivotal
role in process of development in democracy.

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Major objectives of the Indian bureaucracy
1. Creation of a welfare state
2. Serve the party in power- impartial, independent and
professionalism
3. Protect public interest in maintaining the law and order and
ensuring that proper procedures are followed.
4. Facilitator role in providing services such as transportation,
electricity etc
5. Appreciate the diversity and plurality in the society by
following the core ideals of the Preamble and the Indian
constitution.
The role of civil services in a democratic nation can be envisaged
through its role in influencing development activities and ensuring
these policies are citizen centric in nature.

Development
Activities

Civil
service in
democracy
Citizen
Centric
Governance

Civil services in development activities

With their emphasis on rules and regulations, division of labour,
hierarchy, role specialists, rationality, impersonally and neutrality,

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civil services are expected to ensure smooth process of
development. In the development process civil services plays an
important role in policy making and policy implementation
i. Collecting Information
ii. Identifying policy issues and suggesting solutions
iii. Analysing policy choices

Bureaucracy and Citizen Centric Governance

In modern century, Dignity, opportunity and justice became the new
watchwords, and the role of bureaucracy vastly expanded. The
bureaucracy represents the interface between public and state.
The key principles guiding the relations between bureaucracy and
citizens in a democracy should be:

1. Rule of Law - Zero Tolerance Strategy

2. Making Institutions Vibrant, Responsive and Equitable
3. Active Citizens' Participation - Decentralization and
Delegation
4. Transparency and Accountability
5. Ethical values in governance

Salient Features of Indian Bureaucracy

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Neutrality

Permanent Independent

Salient
Features
Professionally
Neutrality
Trained

Public
Hierarchial
Interest

Advantages of the current system

• Does away with the issues in the spoils system-The spoils system
has the propensity to degenerate into a system of patronage,
nepotism and corruption
• Permanent civil service provides continuity and expertise in
dealing with the complex demands of post globalized state
• Allows the governance to factor in long term social payoffs rather
than short term populism.
• Uniformity in administration and act as unifying force in a plural
society.
• Promotes the evolution of strong ethical foundations over time- A
permanent civil service like any other reputable profession is likely
to evolve over time an ethical basis for its functioning.

Issues in civil services

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Despite democracy, we still have a highly centralized state. For a
country of over a billion people, India has an abysmally low number
of policymakers in the public realm. The PM-CM-DM syndrome still
dominates both our psyche and system.
Following ailments are severely affecting the credentials of Indian
bureaucracy:
• Absence of professionalism and poor capacity building
• Alienation from the public and inability to understand the pulse of
public
• Political interference and administrative compliance- The
structures are based on hierarchies and there are a large number
of veto points to be negotiated for a decision to eventually
emerge.
• Inefficient incentive systems that do not appreciate upright and
outstanding civil servants but reward the corrupt and the
incompetent
• Systemic inconsistencies in promotion and empanelment

Lack of adequate transparency and accountability procedures - there

is also no safety for whistle blowers Arbitrary and whimsical transfers
• A gradual erosion in values and ethics in the governance
framework
• Recurring themes of Patrimonialism and clientilism
Recognizing the Call for Change: Civil Service Reforms
Civil service is the backbone of the government. It needs to be
empowered to make quick decisions and implement them.
It is imperative to look into the recommendations of 2nd ARC and
Niti Aayog to initiate big bang reforms in the Indian civil services.

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The recommendations can be broadly classified under following
subjects
• Recruitment- Case for specialists and bringing competition in
career based bureaucracy
• Training and Capacity Building- National Institute of Public
Administration, National Institute of Good Governance
• Promotion policy and Performance Appraisal - A system of
performance appraisal that privilege domain competence over
subjective annual performance appraisal reports
• Accountability and Disciplinary System - To strengthen
accountability mechanisms:
I. 2 intensive reviews at the 14 and 20 year marks
II. Fix a minimum tenure for senior posts, and
III. Establish safeguards against arbitrary dismissal
• Relation between Political Executive and Civil Servants
1. Protect against arbitrary, politically motivated transfers and
postings
2. Implement SC's order of civil service boards
3. Emphasis on passing Parliamentary laws concerning civil
services
• Cadre Management- State cadre: experiment with increasing local
officers & track their performance
• Values and Ethics of Civil Services- Codifying ethical norms and
practices- Code of Ethics to be statutorily institutionalized

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Debate on Lateral Entry into Civil Services
Is the idea a recent one in policymaking?
No, the case for lateral entry has been made by ARC reports and
Committees on Civil Service reforms.
• The first Administrative Reforms Commission (ARC) had pointed
out the need for specialization as far back as in 1965.
• The Surinder Nath Committee and the Hota Committee followed
suit in 2003 and 2004, respectively.
• In 2005, the second ARC recommended an institutionalized,
transparent process for lateral entry at both the Central and state
levels.
Arguments for initiating lateral entry
• Changing dynamics in governance
• Envisaging a shift from a career-based approach to a position-
based approach for the top tier of government jobs.
• Shortfall in numbers: There is an overall 20% shortfall of IAS cadre
officers alone in 24 state cadres. • Quasi-monopolistic hold breeds
complacency and inhibits innovative thinking
• Target oriented and improved competition
• Unwillingness among officers of the state to undertake Centre
deputation.
Arguments against lateral entry
• Kick start an era of spoils system- drive talented people away from
civil service career
• Affects the confidence in the government personnel management
system.
• It is also not clear how lateral entrants would be more
performance-oriented and less process-compliant
• Will increase the disconnect between policymaking and
implementation.

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• The exposure and sensitivity to the country’s complex socio-
political milieu will not be efficiently handled by personnel from
private sector
• Lateral entry only at top level policy making positions may have
little impact on field level implementation
• Lack of sufficient and suitable talent in the private sector and
previous experiences
Way forward
The ultimate remedy lies not through lateral induction but through
more rigorous performance appraisal and improved personnel
management. The government could initiate hiring outside talent to
head mission-mode projects and public-sector entities where
private-sector expertise could be invaluable Eg: Nandan Nilekani and
UIDAI. This will encourage competition among both serving
bureaucrats and market participants. At the same time, the state can
allow civil servants to work outside government — with multilateral
agencies and nonprofits— for short periods to gain expertise and
innovative thinking.

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Corporate governance
What is Corporate Governance?
Corporate governance is a concept which revolves around the
appropriate management and control of a company. SEBI Committee
on Corporate Governance defines corporate governance as the
“acceptance by management of the inalienable rights of
shareholders as the true owners of the corporation and of their own
role as trustees on behalf of the shareholders. It is about
commitment to values, about ethical business conduct and about
making a distinction between personal & corporate funds in the
management of a company.”
Major themes of Corporate Governance
• Trusteeship
• Rights of shareholders
• Equitable treatment of shareholders
• Disclosure and transparency
• Role of stakeholders in governance
• Responsibilities of Board

Components of Corporate Governance Framework

• Recognize and publish the respective roles and responsibilities of
board and management
• Have a board of an effective composition, size and commitment to
adequately discharge its responsibilities and duties
• Actively promote ethical and responsible decision-making
• Have a structure to independently verify and safeguard the
integrity of the company’s financial

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• Reporting- Promote timely and balanced disclosure of all material
matters concerning the company
• Respect the rights of shareholders and facilitate the effective
exercise of those rights
• Establish a sound system of risk oversight and management and
internal control
• Ensure that the level and composition of remuneration is
sufficient and reasonable
Why corporate Governance important?
• It increases the value, sustainability and long-term profits.
• Allows companies to demonstrate good corporate citizenship
through environmental awareness, ethical behavior and social
responsibilities
• Helps in reinforcing confidence and faith of government and
customers in the companies
• Promotes value based corporate culture
• Allows companies to ensure seamless integration into global
economies
Corporate Governance Initiatives in India
• In India, corporate governance initiatives have been undertaken by
the Ministry of of Corporate Affairs (MCA) and the Securities and
Exchange Board of India (SEBI).
• Governance norms for Indian listed companies are set out in
i. The Companies Act,
ii. ii. Clause 49 in the listing agreement that companies sign
with the exchanges and
iii. iii. SEBI’s new Listing Obligations and Disclosure
Requirement Regulations of 2015

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Issues involved in corporate governance
1. Most listed companies and large corporate groups in India
were born as familyowned businesses
2. Conflict between the dominant shareholders and the
minority shareholders.
3. Noncompliance with disclosure norms and even the failure
of auditor’s reports to conform to the law attract nominal
fines
4. Too many listed companies and directors follow the letter of
the law, rather than the spirit. Eg: Clause 49 violated
frequently
5. Unhealthy track record of Participation of women in the
governance framework
6. Independence of independent directors are not effectively
ensured
7. Labour issues-salary wedge between CEO and lower levels is
huge
8. Rights of minority stakeholder

Revamping corporate governance

Uday Kotak Committee
The committee has recommended sweeping changes that will make
corporate affairs more transparent as well as improve the standard
of corporate governance in listed companies. The committee aims to
revamp corporate governance by strengthening the three
gatekeepers—the board, the auditors and the regulator.
Highlights of Uday Kotak Committee
1. Board - It recommended a minimum of 6 directors and a
maximum of 8 to be on the board of listed entities. And at
least 50% (currently one-third) of the board should have

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independent directors and compulsorily one woman among
them.
2. Transparency on appointment of independent directors and a
more enhanced role for them.
3. Stakeholders should approve the application to fill a casual
vacancy of office of any Independent Director
4. Making a distinction between the roles of chairman and
MD/CEO of listed companies.
5. Shareholder meeting and cash flow statement: Top 100 firms
by market capitalisation should webcast shareholder meeting
and all listed firms should have cash flow statement every six
months.
6. It emphasized on regular interaction between NEDs (non-
executive director) and the senior management.
7. Suggested an Audit Committee review for the use of loans or
investment by holding company for over Rs 100 crore.
8. It suggested increasing the number of Audit Committee
meetings to five every year and aspects such as succession
planning, strategy and broad evaluation should be discussed at
least once a year.
9. Transparent disclosure norms-It also recommended that
companies explain significant changes in select financial ratios
in the annual report.
10. Risk management and IT committee: Top-500 listed
companies should have risk management committee of boards
for cyber security.

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