Tiruchirapalli (TN): Good governance is essential for the successful implementation of government policies, C Rangarajan, Chairman, Economic Advisory council to the Prime Minister said on Monday.
"Good governance is needed at all levels. Research shows that per capita income and quality governance are strongly correlated, indicating a virtuous circle, in which good governance results in economic development," he said.
Rangarajan said vast differences had been noticed across states in development outcomes from out of the same mix of development policies.
The differences arose due to differences in governance even as they adopted similar policy packages.
"New ideas, policies and execution form the triad of good governance," he said.
He was delivering the Rajaji Memorial Endowment lecture on "Challenges before the Indian Economy" at the National college here yesterday.
Denying that the new economic policy had diminished the role of the state, Rangarajan said it had only redefined the role of the state, expanding it in some areas and reducing it in others.
"There is nothing in the policy that takes away the role of the state or Pubic sector units," he said.
Pointing that economic growth from 2005-06 to 2010 averaged 8.51 per cent, he said this clearly represented acceleration in the pace of growth and marked a distinct break from any previous five year period.
He also stressed the need to revitalise the farm sector as 60 per cent of the population depended on agriculture. "We should maintain four per cent growth rate in agriculture and allied sectors," he said.