2018 · GS Paper 4 · Q3(a) · 10 marks
What is meant by conflict of interest? Illustrate with examples, the difference between the actual and potential conflicts of interest.
In short
An actual conflict of interest exists when a private interest already bears on a live decision, while a potential conflict is one that may arise later. The Srikrishna inquiry (2019) found Chanda Kochhar breached ICICI Bank's code by not recusing from Videocon loans.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 290 words
Actual Conflict
The private interest already bears on a decision in hand. The Srikrishna inquiry (2019) found ICICI Bank's CEO Chanda Kochhar breached the bank's code by not recusing from Videocon loan decisions while its promoter had invested in her husband's firm.
Office of Profit
Jaya Bachchan's Rajya Sabha disqualification in 2006, for chairing the UP Film Development Council, shows the law treating an existing dual role as an actual conflict.
Potential Conflict
The interest exists but has not yet met a decision, as with an officer holding shares in a firm that may later seek her licence.
Anticipatory Recusal
Justice U.U. Lalit stepped off the Ayodhya bench in 2019 because he had once been counsel in a related case, defusing a potential conflict before it tainted the verdict.
Actual Conflicts
These need immediate recusal, transfer of the file and disciplinary action under the CCS (Conduct) Rules, 1964.
Potential Conflicts
These need asset declarations under the Lokpal and Lokayuktas Act, 2013, divestment and cooling-off periods for regulators.
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Question from the official UPSC Civil Services (Main) Examination 2018 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.