The Second Administrative Reforms Commission (ARC-II)

The Second Administrative Reforms Commission (ARC-II) was set up to draw a new blueprint for India’s public administration. This lesson covers its start, its members, its 15 reports and what happened next. It ends with the 2021 UPSC question on the Department of Personnel.

1.1 How was it set up?

• On 8 April 2005, the Union Cabinet approved setting up the Second ARC as a Commission of Inquiry.
• The Cabinet also set up a Group of Ministers to finalise the areas the Commission could study.
• A sum of Rs. 8 crore was provided for its expenses.
• The Commission was to submit its report within one year of its constitution.

The formal order came on 31 August 2005. It was a Resolution of the Department of Administrative Reforms and Public Grievances, numbered K-11022/9/2004-RC. It says the President was pleased to set up the Commission “to prepare a detailed blueprint for revamping the public administration system.”

The National Common Minimum Programme had planned an Administrative Reforms Commission. The Commission was constituted on 31 August 2005, with the approval of the Cabinet, under the chairmanship of Veerappa Moily.

1.2 Who were the members?

The Resolution named six people.

• Veerappa Moily was the Chairperson.
• V. Ramachandran, A.P. Mukherjee, A.H. Kalro and Jayaprakash Narayan were Members.
• Vineeta Rai was the Member-Secretary.

1.3 Did the membership and the timetable change?

Yes. The Commission was first asked to report within one year, that is by 31 August 2006. The Cabinet extended its term by one year, up to 31 August 2007, on 13 July 2006.

The members also changed, as the Fifteenth Report records.

• Jayaprakash Narayan resigned with effect from 1 September 2007.
• Veerappa Moily resigned as Chairman with effect from 1 April 2009.
• V. Ramachandran was appointed Acting Chairman on 27 April 2009.

The mandate had a main goal, a list of areas, and a short list of exclusions.

2.1 What was the main goal?

The Commission had to suggest measures to achieve a proactive, responsive, accountable, sustainable and efficient administration at all levels of government.

2.2 Which 13 areas did it cover?

The Resolution listed 13 areas to consider.

• Organisational structure of the Government of India.
• Ethics in governance.
• Refurbishing of personnel administration.
• Strengthening of financial management systems.
• Steps to ensure effective administration at the State level.
• Steps to ensure effective district administration.
• Local self-government and Panchayati Raj Institutions.
• Social capital, trust and participative public service delivery.
• Citizen-centric administration.
• Promoting e-governance.
• Issues of federal polity.
• Crisis management.
• Public order.

PIB adds that detailed Terms of Reference with 53 points fell under these 13 areas.

2.3 What could it leave out?

The Resolution says the Commission may exclude the detailed examination of Defence, Railways, External Affairs, and Security and Intelligence. It names Centre-State relations and judicial reforms as subjects already examined by other bodies.

The Commission could still take the problems of those sectors into account when it recommended changes to the machinery of government.

ARC-II presented 15 reports to the Government. The official list is below.

3.1 Which reports did it write?

• Report 1: Right to Information: Master Key to Good Governance.
• Report 2: Unlocking Human Capital: Entitlements and Governance, a Case Study.
• Report 3: Crisis Management: From Despair to Hope.
• Report 4: Ethics in Governance.
• Report 5: Public Order: Justice for All, Peace for All.
• Report 6: Local Governance: An Inspiring Journey into the Future.
• Report 7: Capacity Building for Conflict Resolution: Friction to Fusion.
• Report 8: Combatting Terrorism: Protecting by Righteousness.
• Report 9: Social Capital: A Shared Destiny.
• Report 10: Refurbishing of Personnel Administration: Scaling New Heights.
• Report 11: Promoting e-Governance: The SMART Way Forward.
• Report 12: Citizen Centric Administration: The Heart of Governance.
• Report 13: Organisational Structure of Government of India.
• Report 14: Strengthening Financial Management Systems.
• Report 15: State and District Administration.

3.2 How and when did the reports arrive?

The Commission decided to send its reports in phases, one set of Terms of Reference at a time. It handed the first report to the Prime Minister, Dr. Manmohan Singh, on 9 June 2006.

The printed covers of some reports show their month and year.

• Report 1: June 2006.
• Report 3: September 2006.
• Report 4: January 2007.
• Report 13: April 2009.

3.3 What did the last report cover?

Report 15 dealt with State and District Administration. It also covered the Union Territories, the North-Eastern States and the management of State finances.

• The Commission visited 20 States and 5 Union Territories for it.
• It held public hearings in State capitals.
• The cover says April 2009. Para 1.9 says it was finalised in April and printed in May 2009.

Report 1 was titled “Right to Information: Master Key to Good Governance.”

4.1 Why did the Commission start with RTI?

The Right to Information Act, 2005 is dated 15 June 2005. The Commission gave its first report on RTI to the Prime Minister on 9 June 2006. That is a little under one year after the Act’s date.

Under the Act, some sections came into force at once, including section 12 on the Central Information Commission. The rest came into force on the 120th day after enactment.

4.2 What did the report recommend?

PIB listed these key recommendations on the day of submission.

• The Official Secrets Act, 1923 should be repealed. Safeguards for the security of the State should go into the National Security Act.
• At least half of the members of the Information Commissions should come from a non-Civil Service background.
• A Public Records Office should be set up in each State.
• 1% of the funds of all flagship programmes of the Government of India should be set aside for five years to update records.
• The Information Commission should monitor how the RTI Act is carried out in all public authorities.
• Safeguards should discourage frivolous and vexatious requests.

Report 4, “Ethics in Governance,” is dated January 2007. The Commission calls it “among the most important” reports it was asked to write. It says more honesty in governance would have “a major impact on the everyday lives of the people of India.”

5.1 Which reforms did it suggest for politics and elections?

• Introduce a system of partial State funding of elections, to cut illegitimate and unnecessary funding.
• Decide disqualification for defection by the President or Governor, on the advice of the Election Commission.
• Appoint the Chief Election Commissioner and Election Commissioners on the advice of a collegium. The Prime Minister heads it. The Speaker, the Leader of Opposition in the Lok Sabha, the Law Minister and the Deputy Chairman of the Rajya Sabha are members.
• Set up regional Special Election Tribunals under Article 323B. They should decide election petitions within six months.

5.2 Which reforms did it suggest for ministers and officials?

• Add a Code of Ethics for Ministers to the existing Code of Conduct.
• Let each House of Parliament have an Ethics Commissioner under the Speaker or Chairman.
• Repeal Article 311 of the Constitution, and Article 310 with it. Protect public servants through a law under Article 309 instead.
• Amend the Constitution to create a national ombudsman, the Rashtriya Lokayukta. Its reach should cover Union Ministers (except the Prime Minister), State Chief Ministers and Members of Parliament.

Two other reports show how wide the Commission’s work was.

6.1 What did Report 3 say about crises?

• There is no need for a separate ministry or department of disaster management at the national or State level.
• A National Rainfed Areas Authority may be constituted immediately. It can deal with the issues of drought management.
• In larger cities (say, above 2.5 million people), the Mayor should be directly responsible for crisis management. The Commissioner of the Municipal Corporation and the Police Commissioner assist.

6.2 What did Report 13 say about the Union Government?

Report 13 is dated April 2009. It said the Union Government should primarily focus on these core areas.

• Defence, international relations, national security, and justice and rule of law.
• Human development through good education and healthcare.
• Infrastructure and sustainable natural resource development.
• Social security and social justice.
• Macro-economic management and national economic planning.
• National policies in respect of other sectors.

It also said the principle of subsidiarity should guide the move of functions to State and local governments.

A report is only advice. The Government decides what to accept.

7.1 Which steps did each recommendation follow?

The darpg page gives the steps.

• The concerned ministries and departments consider the recommendations first.
• Their views go to the Core Group on Administrative Reforms (CGAR), headed by the Cabinet Secretary.
• Then the Group of Ministers (GoM) considers them.
• The GoM’s views go to the Prime Minister for information or directions.

7.2 What did the Group of Ministers do?

• The Government formed the GoM on 30 March 2007, under the External Affairs Minister.
• It was reconstituted under the Union Finance Minister on 21 August 2009.
• The darpg page says the GoM had considered twelve reports. The Home Ministry handled the Report on Combating Terrorism. So 13 reports had been considered.
• It said Reports 5 and 10 were soon to go to the GoM.

The Cabinet also took note of progress on some reports.

• On 3 December 2009, on the Second Report.
• On 29 December 2009, on the First and Third Reports.
• On 30 June 2011, on the Sixth Report on Local Governance.

The exam often mixes the two Commissions. Keep their facts apart.

8.1 What was the First ARC?

• A Resolution of the Ministry of Home Affairs (Department of Administrative Reforms) dated 5 January 1966 set it up.
• Morarji Desai chaired it first. K. Hanumanthaiya became chairman when Desai became Deputy Prime Minister.
• It set up 20 Study Teams, 13 Working Groups and one Task Force.
• It submitted 20 reports before winding up in mid-1970. They held 537 major recommendations.
• A report on the position of implementation went to Parliament in November 1977.

An earlier reform step was the 1949 committee under N. Gopalaswami Ayyangar. The UPSC paper spells the name Iyengar. IGNOU’s summary says it recommended grouping ministries into four bureaus, a limit on departments in each ministry, and three grades of minister in each ministry.

8.2 What did the First ARC say about the Department of Personnel?

The First ARC recommended a separate Department of Personnel.

• It should have a full Secretary in charge, working under the general guidance of the Cabinet Secretary.
• It should be placed directly under the Prime Minister.

8.3 What happened next?

On acceptance of the ARC’s recommendations, the Department of Personnel was set up in 1970. It sat in the Cabinet Secretariat and worked under the Prime Minister, helped by a Minister of State. In 1977 it was merged with the Ministry of Home Affairs.

9.1 What did UPSC ask in 2021?

UPSC CSP 2021, Q78.
With reference to the Union Government, consider the following statements:
1. N. Gopalaswamy Iyengar Committee suggested that a minister and a secretary be designated solely for pursuing the subject of administrative reform and promoting it.
2. In 1970, the Department of Personnel was constituted on the recommendation of the Administrative Reforms Commission, 1966, and this was placed under the Prime Minister’s charge.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

9.2 Why is the answer “2 only”?

Statement 2 is supported. The Department of Personnel was set up in 1970, on acceptance of the First ARC’s recommendations. It worked under the Prime Minister.

Statement 1 attributes a recommendation to the N. Gopalaswamy Iyengar Committee. The answer key marks it wrong. The summary of the Ayyangar Committee above lists four bureaus, a limit on departments and three grades of minister. It does not list a minister and secretary for administrative reform.

So the answer is 2 only.

9.3 Which mix-ups should you avoid?

• First ARC: set up 5 January 1966, Desai then Hanumanthaiya, 20 reports, 537 major recommendations.
• Second ARC: set up 31 August 2005, Moily, 15 reports.
• The Department of Personnel of 1970 followed the First ARC, not ARC-II.
• Report 1 of ARC-II is on RTI. Report 4 is on ethics.