The confluence of state, and capitalists have led to the deterioration of public welfare activities. Examine the measures to strengthen ethical governance.

Crony Capitalism is a term used to indicate where national governments have colluded with industrialists to mend the laws of the market economy in favor of industries, i.e., Government sells profit-earning Public Enterprise to private entities.

Example: BPCL, Container Corporation of India.
The sale of public enterprises to private players shifts the core values and objectives of organization from public welfare to private gains resulting in increased prices of goods and services (inflation). Meteoric rise of Industrialists without inventing any ground-breaking technology is a latent example of Crony Capitalism. 
Effect of Crony capitalism: 

1. Privatization: Many PSUs who are privatized were profit-making and sold in the name of inefficient units and were sold at concessional rates which incurred loss to state.
2. Loss of Trust: Transition in core values from Trusteeship to personal gain deteriorates faith in public institutions. 
3. Inequality: Increased prices of goods and services gives undue advantage to private players which reminds us of the old adage “rich gets richer and poor get poorer”. Example: According to Oxfam Report 2021, the top 10% of Indians hold 77% of India’s wealth.
4. Arbitrary and unfair resource allocation: The Economic Survey 2019-20 pointed out that “pro-crony” policies destroy the wealth of the economy as it erodes the process of creative destruction. Example: Coal Block Allocation Scam, 2G Spectrum Bids.

 
Measure needed to strengthen Ethical Governance: 

1. Legal Framework: Caveats in the legal framework shall be filled with appropriate measures to curb misuse of power and corrupt activities by public officials and leaders. 

2. Active and Dynamic Civil Society: Public policies and governance       could be strengthened by continuous engagement of civil society and independent media which could expose corruption and promote ethical governance. 
3. Accountability Mechanism: Strong and effective accountable mechanism will ensure strength of organization and punish corrupt and unethical elements in a timely manner.
4. Professional Socialization Mechanism: Sound training programmes, inculcation of public-spirited values among public leaders and officials will create a strong and positive work culture promoting effectiveness and transparency in governance. 
5. Service Conditions: Adequate salary, stability of residency, consistency in policies helps in attracting and retaining quality human resource. 
Adhering to Gandhiji’s concept of “purity of means” and Bentham “Utilitarian Approach” will ensure transparency and maximum good for the public.