Published on: 3rd January 2026
Authored by: Aarya Deshmane
Vishwakarma University
In India’s fast-changing governance environment, where start-up success, economic independence, and personal branding are promoted, a fascinating dichotomy exists between ambition and accountability. The stereotypical bureaucrat—once viewed as a dispassionate administrator of state policy—today acts in a start-up-driven society with economic autonomy and personal branding.
This shifting ethos questions the conventional understanding of civil service. Is it possible that the twenty-first-century bureaucrat can both be a keeper of public trust and a builder of private enterprise? Is it possible for an officer to dream of innovating, investing, and leading enterprises without overstepping ethical limits?
Public officials hold positions of fiduciary power. Their choices have a bearing on policy, resource allocation, and the administration of justice. If these officers pursue private business—whether directly or indirectly—it increases the likelihood that public power is going to be exercised for private ends. This danger is central to Rule 15 of the Central Civil Services (Conduct) Rules 1964, which specifically prohibits government servants from entering into trade or business without sanction.[1]
The regulation does not just limit—it delineates the character of public service. It captures the constitutional imperative that government shall be conducted with probity, accountability, and transparency. For a democracy, integrity is not so much a virtue; it is a prerequisite for legitimacy.
The Legal Underpinning of Rule 15
Rule 15 of the CCS (Conduct) Rules states:
No Government servant shall, except with the prior sanction of the Government, directly or indirectly engage himself in any trade or business, or take up any other employment.[2]
At its core, this rule is a codification of constitutional morality. It derives legitimacy from Article 309 of the Constitution of India, which empowers the State to regulate the conditions of service of public servants.[3] These conduct rules operate as subordinate legislation intended to ensure the purity of administration—a constitutional imperative under Articles 14 and 21 that guarantee equality and fairness in governance.
The aims of Rule 15 can be classified as:
1. Maintaining Impartiality: Ensuring that no conflict occurs between public obligations and personal interests.
2. Preserving Efficiency: Avoiding diversion of attention or misuse of public time.
3. Protecting Legitimacy: Preventing actions that may generate even the appearance of bias.
This triad is based upon the principle of “public trust”—the belief that power entrusted to public functionaries must always be exercised for the common good of the citizens.
Although sanction by way of exception can be provided in exceptional cases—such as authoring books or undertaking honorary social work—the normal posture is prohibition. The rule, therefore, operates as a defense against erosion of institutional integrity over time.
Judicial Views and Interpretations
Indian courts have supplemented this framework by interpreting “misconduct” and “public duty” in a way that brings legality and ethics into harmony.
In Union of India v. J Ahmed,[4] the Supreme Court ruled that misconduct is not limited to criminal or fraudulent activities but also includes negligence or lack of efficiency to the extent it jeopardizes commitment to duty. The Court made it clear that service in the public sector demands a higher moral standard than private employment. This rationale permits disciplinary authorities to take action against activities that, though not criminal, are against public morality—such as unauthorized business undertakings.
In Union of India and Others v. Subachan Ram and Another,[5] the Court reiterated that prior sanction is not discretionary but obligatory. Even if the public servant pursues business ventures with benevolent motives or under the guise of social welfare, lack of prior sanction amounts to misconduct. The decision highlighted that Rule 15 constitutes strict liability—the mere act of pursuing unauthorized work violates the fiduciary obligation owed to the State.
In Tarlochan Dev Sharma v. State of Punjab and Others,[6] the Supreme Court broadened the debate beyond legality to one of legitimacy. It noted that “the test of propriety is not only what is done, but what appears to have been done.” This proposition acknowledges that administrative morality hinges as much on public perception as on objective reality.
Together, these cases create a legal-ethical spectrum: misconduct (J Ahmed), rule compliance (Subachan Ram), and perceptional integrity (Tarlochan Dev Sharma). Collectively, they establish that public service cannot be combined with private business without jeopardizing trust.
Recent Trends and Administrative Enforcement
Enforcement of conduct rules remains an ongoing concern for Indian governments. Recent disciplinary measures demonstrate the continued relevance of the ethical approach captured in Rule 15.
In October 2024, Karnataka Rural Development Minister Priyank Kharge demanded disciplinary action against officers attending functions organized by the Rashtriya Swayamsevak Sangh (RSS), claiming that such behavior was inconsistent with the neutrality expected of public servants.[7]
Likewise, the Rajasthan government sanctioned disciplinary proceedings against fourteen officers for indiscipline and dereliction of duty, indicating institutional adherence to accountability.[8]
Although neither case is strictly related to entrepreneurship, both demonstrate the same moral stance: government officers should not pursue activities—ideological, commercial, or otherwise—that compromise administrative impartiality.
Ethical Dimensions: The Fiduciary Principle
This debate rests on the fiduciary principle. The State-officer relationship is analogous to the trustee-beneficiary relationship. The officer, as trustee, has a duty to act solely for the public good.
The fiduciary requirement exists on two levels:
a. Positive Duty: Actively promoting public interest.
b. Negative Restraint: Refraining from actions that may give rise to conflict.
This dual standard elevates Rule 15 from an administrative prohibition to a moral discipline. Where a bureaucrat engages in business, the potential for insidious partiality—favoring a specific contractor, granting licenses, or affecting procurement—makes them ethically vulnerable even before corruption sets in.
Good governance calls for not only the absence of wrongdoing but the presence of restraint. As established in Tarlochan Dev Sharma, the essence of good governance is the appearance of propriety, not merely its substance.
Comparative Insights: Learning from Other Jurisdictions
Democratic governments worldwide have confronted similar challenges. The UK Civil Service Code permits some external employment but only with disclosure and departmental approval. Canada’s Code of Values and Ethics for the Public Sector (2012) mandates that public servants avoid real or perceived conflicts of interest.
India’s system is more conservative, a legacy of colonial bureaucracy in which political impartiality was the top priority. This conservatism, however, is justified by scale—India’s bureaucracy is immense, multifaceted, and subject to greater risks of influence-peddling.
Global experience also offers lessons. The OECD Guidelines on Managing Conflict of Interest in the Public Service (2003) suggest a shift from prohibition to prevention—emphasizing transparency, disclosure, and management of conflict rather than outright bans.[9] India’s future reforms could move in this direction, but only when institutional oversight reaches maturity.
The Case for and Against Bureaucratic Entrepreneurship
A. The Argument for Reform
Reformists claim that the bureaucracies of the world are transforming from strict hierarchies to nimble, knowledge-based ecosystems. Allowing bureaucrats to become licensed entrepreneurs could bridge the gap between innovation and administration. Officers would be able to contribute to start-ups in education, green initiatives, or technology that promote public welfare, while maintaining ethical safeguards through disclosure.
This model would also serve as an antidote to bureaucratic stagnation and promote creativity, cross-sectoral learning, and motivation. Moreover, as civil servants become more involved in start-up facilitation, policy incubation, and public-private partnerships, permitting limited entrepreneurial participation may align incentives with results.
B. The Case for Restraint
However, critics caution that flexibility in this direction invites administrative chaos. In a system as politicized and corruption-prone as India’s, allowing bureaucrats to operate or invest in businesses may blur accountability. Even with transparency measures, the power imbalance between officers and citizens renders the likelihood of subtle manipulation real and dangerous.
Ethically, public office cannot coexist with personal enterprise without compromising the spirit of impartiality. The virtue of restraint thus becomes the very definition of integrity.
Consequences of Violation
Violating Rule 15 invokes disciplinary action under the Central Civil Services (Classification, Control and Appeal) Rules 1965. Sanctions range from censure to dismissal. The jurisprudence of Subachan Ram establishes that failure to obtain prior sanction constitutes misconduct; J Ahmed extends the concept of misconduct to acts contrary to administrative ethos; and Tarlochan Dev Sharma elevates perception to a disciplinary standard.
Thus, the law enforces accountability through three dimensions—legal, procedural, and ethical—precluding any justification of unauthorized private enterprise in the name of public service.
Constitutional Morality and Administrative Ethics
The concept of constitutional morality, as articulated by Dr. B.R. Ambedkar, requires compliance not merely with the letter but also with the spirit of the Constitution. Bureaucrats, as guardians of public trust, embody this morality by submitting to ethical administration.
Article 309 empowers the State to enact rules governing service conditions. Rule 15, enacted pursuant to this power, must be interpreted in consonance with Articles 14 and 21—guaranteeing reasonableness, proportionality, and fairness. By regulating bureaucratic entrepreneurship, the rule does not stifle liberty; it safeguards equality in administration and public trust in administrative neutrality.
Integrity as the Ultimate Enterprise
Public service is not a job of convenience; it is a covenant of trust. While entrepreneurship celebrates innovation, public service demands integrity of intent. The two may not always be mutually exclusive, but they must never converge without ethical oversight.
Rule 15 of the CCS (Conduct) Rules 1964, buttressed by jurisprudence in J Ahmed, Subachan Ram, and Tarlochan Dev Sharma, remains a constitutional compass guiding administrative conduct. The recent trend of enforcement in Karnataka and Rajasthan only reinforces that governments continue to vigilantly guard neutrality and accountability.
The demand for reform—albeit genuine in intent—should not necessitate compromising the soul of public service. Institutional maturity, transparent conflict resolution, and constitutional safeguards are what India needs before bureaucrats can become entrepreneurs.
Until that point, the answer remains unchanged: bureaucrats can innovate in governance, but their only permissible business is public trust.
References
[1] Central Civil Services (Conduct) Rules 1964 (India) r 15.
[2] Ibid.
[3] Constitution of India 1950, art 309.
[4] Union of India v. J Ahmed, AIR 1979 SC 1022, (1979) 2 SCC 286 (SC).
[5] Union of India and Others v. Subachan Ram and Another, (2022) 15 SCC 269 (SC).
[6] Tarlochan Dev Sharma v. State of Punjab and Others, (2001) 6 SCC 260 (SC).
[7] Times of India, ‘Priyank now seeks ban on govt staff attending RSS events’ (Bengaluru, 17 October 2024)
[8] Times of India, ‘CM approves disciplinary action against staff in 14 cases’ (Jaipur, 16 October 2024)
[9] Organization for Economic Co-operation and Development (OECD), Managing Conflict of Interest in the Public Service: Guidelines (OECD Publishing 2003).
[10] I P Massey, Administrative Law (9th edn, Eastern Book Company 2022).
[11] M P Jain and S N Jain, Indian Constitutional Law (8th edn, LexisNexis 2019).
