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Day 80 – Q 2.How does financial probity help in the effective utilisation of public funds. How is financial probity different from austerity? Explain.

2. How does financial probity help in the effective utilisation of public funds. How is financial probity different from austerity? Explain. 

सार्वजनिक धन के प्रभावी उपयोग में वित्तीय सत्यनिष्ठा कैसे मदद करती है। वित्तीय सत्यनिष्ठा कैसे मितव्ययिता  से अलग है? समझाएं।


Probity is the act of strict adherence to highest principles and ideals (integrity, good character, honesty, decency) rather than avoiding corrupt or dishonest conduct. It balances service to the community against the self-interest of individuals. Probity contains for things –

  • Integrity
  • Moral Knowledge
  • Decency, Humbleness
  • Strong positive emotion

Financial probity means, strict obedience to a code of ethics based on absolute honesty, especially in commercial or monetary matters and beyond legal requirements.


Financial probity helps in the effective utilisation of public funds

  • Civil servants deal with public fund, given to government by people in trust. Since it is not their own money, unlike private sector, practicing financial probity becomes extremely important for civil servants.
  • Justice and rule of law – treat tender participants fairly and equally, and avoid giving one tender participant an improper advantage over another.
  • Maintain confidentiality of participants’ confidential information, including commercially sensitive information and intellectual property.
  • Ensure tender processes, negotiations, evaluation processes, and contract management processes are auditable, transparent and accountable.
  • Proactively identify and manage conflicts of interest whether real, potential or perceived appropriately and in accordance with applicable legal and policy requirements, including applicable Victorian Public Sector codes of conduct.
  • Financial probity in governance is the antithesis of corruption in public life.

How is financial probity different from austerity?

Austerity is defined as a set of economic policies a government implements to control public sector debt. Like financial probity it is also a concept in financial ethics. However –

  • Austerity measures are in response to public debt. It is a risk management strategy. Financial probity concept comes into picture when government is spending more.
  • Austerity may lead to more unemployment. This is not the case with financial probity.
  • Austerity is more end-oriented. Financial probity is more-mean oriented.   


Financial probity in governance is an essential and vital requirement for an efficient and effective system of governance and for socio-economic development. Ensuring financial probity in public sector activities by civil servant is part of every public official’s duty to adopt processes, practices and behaviour that enhance and promote public sector values and interests.

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