Shri Kamal Nath, Union Minister of Commerce and Industry, has stated that good governance will contribute to an even higher rate of economic growth. The process of economic liberalisation and globalisation are intrinsically linked with good governance and the good economic governance will go a long way in building the necessary social capital needed for promoting growth, he said. He was speaking at the 102nd Annual Session of the PHD Chamber of Commerce and Industry, here today. He further said that the Indian economy has achieved a robust growth of 9% plus and this makes us one of the fastest growing economies in the world. "We are increasingly recognised as a global economic power. India of 2007 is more confident, more enterprising and more competitive. There are, however, a number of issues which the governance of this country has to address and address quickly", the Minister said.

Shri Kamal Nath stated that the guiding force behind the concept of good governance is people's active participation, and added that the other indicators are: decentralization & deconcentration; accountability & transparency; full access to justice; elimination of all forms of discrimination; maintenance and fostering of peace; and adequate budgetary provision for social priority areas.

Outlining the future challenges, Shri Kamal Nath stated that the foremost issue is 'inclusive growth' and ensuring that benefits of growth trickles down to all sections of society particularly the marginalized. Poverty, unemployment, low growth rate in agriculture sector, provision for safe drinking water and sanitation, education, housing and health care facilities for all are other vital challenges that have to be tackled urgently.

Drawing global parallels, the Minister said that it has become more relevant to examine the relation between institutional capacities for effective economic governance at the national level and poverty elimination. "By studying the governance and poverty experiences of some newly industrialised, developing and transitional economies, findings and proposals should be applicable to their equivalents elsewhere. Let me cite the example of South East Asia. The per capita income of East Asian countries which were only marginally better off than the Sub Saharan Africa in 1960 became 5 times theirs by the year 1995. Good Governance in East Asian countries was identified as the prime factor responsible for their superior performance and, since then the link between economic development and governance is being increasingly realized", Shri Kamal Nath emphasised.

Good governance as policy foundation: governance reforms and institutional capacity are essential to secure inclusive growth and social delivery. Good governance is advanced as a foundational policy instrument to foster higher economic growth and social capital, with principles such as decentralization, accountability, transparency, access to justice, nondiscrimination, peace, and adequate social budgetary provision. The address stresses that governance reforms are essential to achieve Inclusive Growth, ensure that growth benefits reach marginalized groups, and to tackle challenges including employment, agricultural performance, water and sanitation, education, housing, and healthcare through strengthened institutional capacity and comparative policy learning.