The latter parts of the nineteenth century witnessed the birth of Industrial Revolution in England which brought about sea change in the philosophy of governance, changing it from laissez faire to welfare state. Now, the government is responsible for the welfare of the people in complete sense. As a consequence, the normal functions of the government have increased manifold. In order to fulfil this need, laws, rules and regulations are needed. Lawmakers enact appropriate laws and the administrative machinery further make rules and regulations justifying the needs of the people's welfare. Therefore, we have got plethora of rules and regulations and wide powers for the administrative authorities. However, this power has to be exercised with alacrity and even a slight misuse of this power will adversely affect the people's welfare. This paper deals with the various aspects of the administrative discretion which is a must for effective implementation of the philosophy of welfare state.