India's Interventionist State: Reduce Its Scope and Increase Its Capability

Abstract: This paper lays out a two-part strategy to improve the effectiveness of the state in India reduce the scope of the state and then improve its capability. It argues that the state tries to do too many things and ends up doing many of them badly. It must reduce its scope and change the way it does things – reduce their complexity. It must also strengthen the capabilities of the state institutions – especially those dealing with administrative functions and rule of law. The state must also build up the capability of local administration and increase its financing. It must also get out of the business of business by privatizing state -owned enterprises.