Preventive vigilance better governance tool: Patel
Preventive vigilance could be used as an effective tool of governance in public sector institutions, RBI Governor Urjit Patel said on Thursday. Punitive vigilance might not yield the desired result, he added. Patel was speaking at a conference at the Central Vigilance Commission.
RBI Governor Urjit Patel said on Thursday that preventive vigilance can be used as an effective tool of governance in public sector institutions, arguing that punitive vigilance may not yield the desired result.
Patel was speaking at a conference at the Central Vigilance Commission (CVC) here on ‘Preventive Vigilance - The Key Tool of Good Governance at Public Sector Institutions’.
Patel said “preventive vigilance is aimed at reducing the occurrence of a lapse (violation of a law, a norm, or, broadly speaking, a governance requirement), while punitive vigilance seeks to deterring the occurrence of a lapse.”
He said that punitive vigilance is difficult in a public sector institution for several reasons, adding the rewards are low to start with, thereby limiting the possibility of downward revisions.
Given this constraint, Patel said that disciplinary actions that limit the chances of career progression are often the preferred punishment.
“However, this has the misfortune of demotivating employees beyond the point of their career when punitive vigilance action is undertaken. This could, in principle, be dealt with a ‘golden handshake’; however, the insurance that public sector jobs offer is often a key attractive feature of these jobs given the lack of significant upside financial rewards,” he said.
Also, detective vigilance too is rendered somewhat ineffective, he said. Put simply, detection does not lead to punitive outcomes so that investment in detective vigilance does not guarantee the desired reduction in incidence of lapses, even though it might help in some cases arrest the slide and contain with remedial measures, Patel argued. As a result preventive vigilance takes centre-stage and becomes a key effective tool of governance in a public sector institution, the RBI chief said, while elaborating on various aspects of vigilance. “In other words, while not taking away from the need to engage in some detective and punitive vigilance, preventive vigilance is conceptually likely to be the most effective governance mechanism at public sector institutions,” Patel stressed.
Referring to vigilance mechanism at the Reserve Bank, he said the overall responsibility for vigilance work at the central bank vests with the Central Vigilance Cell.