This chapter attempts to delineate the possible role of governance oriented reform in India today. It raises conceptual and historical difficulties with the notion that sees governance failure as the cause of poor economic performance and discusses why there are certain regularities in the occurance of good governance, distinguishing the same from 'functional governance' which aids and abets industrialisation. Next it goes on to discuss the interlikages between institutions, economic development and governance in India, and why internal attempts at reform thus far have failed. Finally it brings out the current failures in governance that are actionable and suggest that they are largely corrected by changes in economic policy and some institutional initiatives. Attention to governance as such is warranted only to build organisations and initiatives for commercialisation and privatisation, and for appropriate changes in the law and in the development of frameworks for regulation and contracting out.

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