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India: financial accountability reform (ex gratia etc)

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KLNMurthy
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Posts: 3514
Joined: 17 Aug 2005 13:06

India: financial accountability reform (ex gratia etc)

Postby KLNMurthy » 14 Jun 2015 20:20

[admins, I didn't see an appropriate thread for this, so I started a new one. Please feel free to delete / relocate if appropriate]

When people get hurt or killed or lose property and livelihood due to commission and omission by government, quasi-government or even large private industries, some sort of compensation to the victims is usually given. The concept that people are owed compensation in such cases is what I mean here by public financial accountability.(PFA)

Pobably the most familiar example of PFA is ex gratia (literally "out of pity") payments made to victims of accidents, natural disasters, farmer suicides etc. Some people suffer due to incidents that are arguably traceable to bad operations or bad design or bad policy. Without going into the question of whether government (or big industry) is responsible, government hands out some ex gratia payment or promises a job to a family member of the deceased victim. The matter ends there.

The common alternative is to litigate responsibility in court, under tort law. Once responsibility is fixed, amount of compensation is calculated, and may also include punitive damages, intended to make the government or business entity be careful in future. The upside here is that there is fostering of an environment of debate about responsibility, and an environment of being careful a priori to avoid lawsuits. The downside is excessive litigiousness, and delays in getting relief.

The upside of ex gratia is that relief is relatively quick, without having to wait for decades of court proceedings to play out with uncertain results. It is like out-of-court settlement in every case. The downside is that it fosters a culture of mai-baap sarkar with little room for responsibility to do good design, develop good policy and operations.

I started thinking about this issue during a recent strand about farmer suicides on the political drama thread. My feeling is that we have pushed the limits of usefulness of the ex gratia system; it is easy to see, for example, that farmers are being pushed into suicide by ex gratia, and we can't even recognize that it is happening.

How should a better PFA system for today's Indian conditions look?

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