Control of Public Corporations with Special Reference to Lokpal and Lokayukta of States
Public corporations play a vital role in modern governance. They manage essential services such as transport, energy, finance, and infrastructure. Although these corporations enjoy functional autonomy, they deal with public money and affect citizens directly. Therefore, effective legal and institutional control over public corporations is essential to prevent corruption, misuse of power, and administrative arbitrariness. The law of administration provides several mechanisms to regulate these bodies, including parliamentary control, judicial review, audit mechanisms, and independent vigilance institutions.
Among these control mechanisms, the institutions of Lokpal and Lokayukta occupy a central position. They function as independent watchdogs to ensure transparency, integrity, and accountability in public administration, including public sector corporations.
Meaning and Nature of Public Corporations
Public corporations are statutory bodies created by legislative enactments to carry out commercial or service-oriented functions on behalf of the State. They possess a separate legal identity, perpetual succession, and the power to sue and be sued. Examples include public sector undertakings in transport, banking, and energy sectors. While these bodies are expected to operate with managerial efficiency, their public character demands strict accountability.
Under administrative law, public corporations are subject to constitutional principles such as equality under Article 14, reasonableness, and non-arbitrariness. Courts have consistently held that public corporations cannot act like private traders when public interest is involved. Hence, multiple layers of control have been developed to balance autonomy with accountability.
Need for Control over Public Corporations
Control over public corporations is necessary to protect public funds, prevent abuse of power, and ensure ethical governance. Due to their vast financial resources and discretionary powers, these bodies are susceptible to corruption, favoritism, and maladministration. Traditional controls like ministerial supervision and audit mechanisms often prove insufficient, especially when political influence interferes with transparency.
This gap led to the evolution of independent oversight institutions such as Lokpal at the central level and Lokayuktas at the state level. These institutions strengthen administrative accountability by providing an independent forum for complaints against public officials and authorities connected with public corporations.
Lokpal as a Mechanism of Control over Public Corporations
The Lokpal institution was established under the Lokpal and Lokayuktas Act, 2013, inspired by the ombudsman model. The Lokpal has jurisdiction over public servants, including officials of public sector undertakings and bodies receiving substantial government funding. It investigates allegations of corruption, abuse of office, and maladministration.
The Lokpal acts as a powerful external control mechanism by conducting inquiries independent of executive influence. It can order preliminary investigations, full-fledged inquiries, and prosecution through competent agencies. This ensures that officials of public corporations remain accountable even at higher administrative levels. The presence of Lokpal enhances public confidence and deters corrupt practices within public corporations.
Role of Lokayukta in States
At the state level, Lokayuktas perform functions similar to the Lokpal. State Lokayukta Acts empower them to investigate complaints against ministers, legislators, and public servants, including officials of state public corporations. Although the structure and powers of Lokayuktas vary from state to state, their primary objective remains administrative accountability.
Lokayuktas examine cases of corruption, favoritism, abuse of power, and failure to perform statutory duties. They submit reports to the Governor or State Legislature, which increases moral and political pressure on the government to take corrective action. In states with strong Lokayukta laws, public corporations tend to function with greater transparency and discipline.
Judicial and Administrative Significance
The judiciary has repeatedly emphasized the importance of independent vigilance institutions in maintaining clean administration. Courts recognize Lokpal and Lokayukta as vital instruments of democratic governance. These institutions complement judicial review by addressing issues at the administrative level before they escalate into constitutional litigation.
From an administrative law perspective, Lokpal and Lokayukta strengthen the principles of rule of law, accountability, and fairness. They act as a bridge between citizens and the State by offering an accessible grievance redressal mechanism against powerful public authorities and corporations.
Limitations and Challenges
Despite their importance, Lokpal and Lokayuktas face challenges such as delay in appointments, lack of adequate resources, and non-binding recommendations in some states. Political resistance and procedural hurdles also affect their effectiveness. Strengthening their powers, ensuring independence, and uniform implementation across states remain essential reforms.
Mnemonic to Remember the Answer
“CLEAN CORP”
C – Control is necessary
L – Lokpal at Centre
E – Ethical governance
A – Accountability
N – No corruption
C – Corporations
O – Ombudsman system
R – Rule of law
P – Public interest
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