Roadmap for Answer Writing Introduction Briefly introduce the concept of interdependence between government effectiveness and people’s participation in governance. State the thesis: In India, the effectiveness of government systems at various levels is closely linked to the active involvement of citizens in the ...
Model Answer Introduction The Satyam Scandal, often dubbed "India’s Enron," emerged in 2009 when Satyam Computer Services' chairman, Ramalinga Raju, confessed to falsifying company accounts. This revelation shocked stakeholders and prompted a reevaluation of corporate governance practices in India.Read more
Model Answer
Introduction
The Satyam Scandal, often dubbed “India’s Enron,” emerged in 2009 when Satyam Computer Services’ chairman, Ramalinga Raju, confessed to falsifying company accounts. This revelation shocked stakeholders and prompted a reevaluation of corporate governance practices in India.
Body
The scandal led to significant reforms aimed at enhancing transparency and accountability in corporate governance.
1. Role of Independent Directors
The Satyam scandal underscored the crucial role of independent directors. In response, the Companies Act, 2013 mandated that at least one-third of the board of public companies must consist of independent directors, outlining specific duties and responsibilities to ensure effective oversight.
2. Auditing Reforms
The integrity of auditors came under scrutiny, leading to reforms that included the rotation of auditors and audit firms for listed companies every five years and ten years, respectively. This measure aims to reduce conflicts of interest and over-familiarity.
3. Establishment of NFRA
To enhance the auditing profession’s oversight, the National Financial Reporting Authority (NFRA) was established. This independent body is empowered to investigate professional misconduct and enforce compliance with accounting standards.
4. SEBI Reforms
The Securities and Exchange Board of India (SEBI) implemented stricter corporate governance norms, enhancing disclosure requirements for listed companies and ensuring quicker redressal of investor complaints.
5. Whistleblower Policy
The Companies Act, 2013 mandated listed companies to establish a vigilance mechanism, allowing directors and employees to report unethical behavior or suspected fraud, fostering a culture of accountability.
6. Enhanced Disclosure Requirements
The Act increased disclosure obligations, requiring directors to disclose interests in other entities and mandating detailed reporting of related-party transactions and managerial remuneration.
7. Class Action Suits
For the first time, provisions for class action suits were introduced, enabling shareholders and depositors to seek damages for fraudulent activities or violations of the law.
Conclusion
The Satyam Scandal marked a pivotal moment in India’s corporate governance landscape, leading to reforms aimed at ensuring greater transparency and accountability. The effectiveness of these changes will depend on their rigorous enforcement and adherence by the corporate sector.
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Model Answer Introduction The effectiveness of the government system at various levels and people's participation in governance are interdependent concepts crucial for a thriving democracy. In India, this relationship is evident through the functioning of the three-tier government structure—central,Read more
Model Answer
Introduction
The effectiveness of the government system at various levels and people’s participation in governance are interdependent concepts crucial for a thriving democracy. In India, this relationship is evident through the functioning of the three-tier government structure—central, state, and local—and the significant role of citizen involvement.
Body
Case Studies of Effective Governance
Health Sector:
States like Tamil Nadu and Kerala exemplify how effective governance relies on citizen participation. Kerala’s successful response to the Nipah virus in 2018 and the COVID-19 pandemic was largely due to the active engagement of Local Self Governments (LSGs) and community involvement, showcasing the effectiveness of decentralized health governance (Source: Kerala State Health Department, 2020). In Tamil Nadu, significant public participation in implementing the Public Health Act has contributed to building a robust health infrastructure.
Role of Decentralization
The 73rd and 74th Constitutional Amendments established Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs), enhancing local governance and citizen participation. These bodies facilitate participatory planning and budgeting, allowing citizens to influence resource allocation and development priorities.
Social Audits and Transparency
Social audits empower citizens to monitor government schemes, fostering accountability. The Right to Information (RTI) Act further enhances transparency by enabling citizens to access government functioning details, thereby reducing corruption (Source: Transparency International, 2021).
Civil Society Organizations
Civil society organizations play a critical role in raising awareness about government schemes and ensuring that citizens access their rights. They act as watchdogs, holding the government accountable and bridging the gap between the system and the populace.
Technology and Citizen Participation
Technology has become a vital tool for promoting citizen engagement. Online platforms like MyGov facilitate public participation in policymaking, while initiatives like Digital India streamline service delivery, ensuring benefits reach intended beneficiaries efficiently.
Conclusion
The Delhi model of education highlights effective government-citizen collaboration. The transformation of government schools through School Management Committees (SMCs) illustrates how participatory governance can lead to significant improvements. Strengthening the interdependence between government effectiveness and citizen participation is essential for inclusive development and the well-being of all citizens in India.
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