This is where the role of state governments comes into focus. The implementation of many of our social and human development programmes is in the hands of state governments. The capacity of state governments to effectively plan and implement these programmes varies from state to state.

I believe this is an area for further action. If we can improve the administrative capacity of state governments, we can do much more in making the growth process more socially inclusive. Therefore, while there is still an unfinished agenda of economic reforms awaiting our attention at the Centre, the real action will have to be at the level of states.

In this context, I must compliment McKinsey for the initiatives it has taken in India to work with state governments. I don’t think there is any lack of thinking on what needs to be done to sustain and further accelerate growth. There is also fairly wide recognition of the importance of this agenda. However, given the nature of competitive politics and the very fractured mandates given to governments, it has become difficult sometimes for us to do what is manifestly obvious.

The successful implementation of our social and human development initiatives requires greater public-private partnership. This is yet another important initiative of our government. Both in infrastructure development and in social and human development, we have encouraged such partnerships.

I have been deeply concerned about the efficiency of utilisation of public funds, especially in infrastructure development, education and health care. I have been looking for ways to combine our concern for equitable outcomes with our concern for efficient utilisation of outlays. I find PPPs as an effective means of combining these two considerations. This is not yet a fully evolved paradigm of governance. We have bravely, yet cautiously, sailed forth into uncharted waters.

... contd.