Public Administration Mains 2017 : Solved Paper Question Paper-2 (Question-8)

Public Administration Mains 2017 : Solved Paper Question Paper-2 (Question-8)


Q8) a) Discuss, with sustainable examples, the emerging challenges faced by the Regulatory Commissions as to the arbitrary agents between the State and the market forces (20). (Significant issues in Indian Administration)

ANSWER : There are three sets of justifications for regulatory interventions -- prevention of market failures, restriction or removal of anti-competitive practices, and promotion of public interest.

Market failure is a condition in which the market mechanism fails to allocate resources efficiently to maximize social welfare. 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. Examples include water distribution and railway lines.

In India, because of the adoption of regulatory reforms, rising demand and fixed cost reducing technology, telecom is no longer a natural monopoly. The electricity sector was originally a bundled monopoly but unbundling has led to the introduction of competition in certain segments. Two segments, transmission and distribution, are still natural monopolies. The water sector is still a natural monopoly and completely controlled by the government. 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 an efficient allocation of resources. For example, a patient at a clinic knows less about his ailment and necessary treatment than his doctor, a situation the latter can manipulate to his advantage. This creates a role for regulation of market transactions or provision of information by a third party to remove or minimise information asymmetries.

b) “The ‘policy of non-action’ regarding the institutional mechanisms and legal provisions to eradicate corruption is a feature of Indian Administration.” Critically examine (20) (Significant issues in Indian Administration)

ANSWER : Corruption has been seen as an immoral and unethical practice in India. India’s legislation relating to corruption and corrupt practices includes a web of legal provisions and Government regulations. The Prevention of Corruption Act of 1947 was enacted immediately after independence.

The IPC criminalised taking bribes, influencing a public servant through illegal means and public servants accepting valuables gifts. All these provisions were repealed by the POCA.

In 1988 POCA was enacted to consolidate all laws relating to offences by public servants.

(a) POCA criminalised only bribe-taking and not bribe-giving.

(b) POCA does not stipulate a time limit for completion of trials relating to corruption.

(c) Prosecution of public servants under POCA requires prior sanction from the competent authority.

After India’s ratification of UNCAC, the Government of India initiated measures to amend POCA to bring it in line with international standards. These included –

a. Prosecuting private persons for offences,

b. Stipulated time-limits for trials,

c. Take control of tainted property,

d. Handling the act of offering as bribe

c) “The Second Administrative Reform Commission (ARC) makes a strong case for the principle of subsidiary .”Elaborate (10) (Administrative Reforms since Independence)


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