CBI Director Vijay Shankar welcomes Chairman of Economic Council C. Rangarajan at the D.P. Kohli Memorial Lecture in New Delhi on Thursday. — Photo: PTI

NEW DELHI: If the country's economic growth rate, already touching the eight per cent mark in 2005-06, is to be sustained, there was a need to address, on a priority basis, agriculture, infrastructure growth, fiscal consolidation, quality primary education and basic health, globalisation and good governance.

"Good governance is a combination of transparent and accountable institutions, strong skills and competence, pecuniary and professional integrity, and a fundamental willingness to do the right thing. The test of good governance is ultimately the quality of service at the cutting edge level," Chairman of Economic Advisory Council to the Prime Minister C. Rangarajan said here on Thursday.

Asserting that the quality of governance separated success and failure in economic development, he said that across countries application of the same policies in similar contexts had produced dramatically different results. Research showed that per capital incomes and quality of governance were strongly correlated.

Dr. Rangarajan was delivering the seventh D.P. Kohli Memorial Lecture on "Economic Growth and Issue of Governance," organised by the Central Bureau of Investigation as a mark of honour to the agency's Founder-Director.

He said anti-poverty programmes might be totally undermined by weak accountability, corruption and "capture" of programmes by vested interests.

"Often hostile government-citizen interface may alienate people from the ruling class and erode the government's credibility. Legislation promoting social development may come to naught if laws are not implemented without fear or favour. Efforts to promote private investment may not succeed unless the rules of the game are clear and potential investors see governmental action to be credible, rational, transparent and predictable," he said. Failure to involve people in development process might erode its benefits and compromise its sustainability.

Describing India's economic reforms as "unique" in two respects — their implementation in a democratic context and pursuing them in a decentralising context — he said the democracy-federalism context often meant restraint, even compromise, deliberate decision-making and slow progress.

Underlining the essential characteristics of good governance under three heads — rule of law, accountability for actions and results and combating corruption — the former Reserve Bank of India Governor voiced concern over the high incidence of corruption, especially at the cutting edge level.

"In fact, corruption has become so entrenched in our system that we have totally acquiesced in it. We accept it as an unavoidable part of our democracy and governance structures."

Combating corruption was critical to improving the quality of life of people. A two-fold strategy was needed to contain corruption. First, the opportunities for corruption must be reduced and it can happen as the country carried forward economic reforms and reduced all forms of controls, which resulted in rent-seeking opportunities.

Minister of State for Personnel Suresh Pachauri, CBI Director Vijay Shanker, National Security Advisor M.K. Narayanan, Deputy Chairman Planning Commission Montek Singh Ahluwalia were among those present.

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