What are the administrative and ethical issues involved in the above situation?

Linked PYQ

Seema is a senior bureaucrat with a reputation of honesty and professional efficiency. She has recently been posted as the District Collector (DC) to Surinder Nagar, where a large industrial area is being established. The new industrial area had caused many farmers to submit applications for change of land use (CLU) to convert their farmlands into residential areas. There is an unusually large backlog of these applications awaiting processing. Seema noticed that some applications had been approved selectively with no visible chronological pattern. The case files showed a few complaints of some approvals being subject to receipt of large bribes from the applicants. On further fact-finding, Seema realized that a small group of touts was controlling this illegal activity through some subordinate officials in the Collectorate. This had created a fear in the other employees who were reluctant to process any application. The resultant backlog has been piling up thereby hindering local economic progress and causing public dissatisfaction. Seema was faced with a major moral and administrative challenge of dismantling this corruption network without hampering daily administrative operations. An aggressive internal investigation would result in institutional resistance and, possibly, a backlash from labour unions. Conversely, ignoring this situation would encourage the wrongdoers and unnecessarily continue this avoidable harassment to the populace. (a) What are the ethical issues involved in this case? (b) Discuss the options open to Seema. Identify the recommended option and justify it.