"Our government is committed to ensuring that India will have the quality of infrastructure it needs," Dattratreya said in his opening remarks. "More than any other governments in the past, we realise that the Centre cannot do it alone," he said.

The two-day conference organised by the Infrastructure Development Finance Company Ltd (IDFC) in association with the Planning Commission and the World Bank is being widely attended by state government representatives. The second day of the conference is in fact devoted entirely to presentations by state governments and an interface between them and potential investors.

In his address, IDFC chairman Deepak Parekh said, "the point of the conference" was that the "stage of action had shifted predominantly to states and away from the Centre." The minister said states were in a better position to respond to the `requirements of the people', and would therefore, have to be involved in a `constructive partnership effort' with the Centre to build power projects, roads and urban services.

Dattratreya pointed out that many states had already become pro-active about developing infrastructure services. Orissa has privatised electricity distribution and Andhra Pradesh is poised to follow suit.

Private roads are already operational in Madhya Pradesh and the first large private water supply system was being completed in Tamil Nadu, he said. The urban affairs minister also emphasised the need to rope in the private sector.

"Private sector participation is needed not only to bring investments into areas where the government does not have sufficient resources," Dattratreya said, "but...to (also) improve operational and investment efficiency." He said the states did not have to remain direct suppliers of infrastructure services any longer.

State governments would only have to facilitate the private sector in `supplying' infrastructure services in the most cost-effective manner. The minister pointed out that private providers could be `equally bad' at service delivery if they enjoyed a monopoly status and should be compelled to operate in a competitive environment.

Wherever such competition was not immediately possible, regulators would be necessary, he said, to mediate between the interests of consumers and the commercial viability of infrastructure services. Once the onus of providing infrastructure services is passed on to the private sector, the governments could devote more resources to health, education and poverty alleviation, Dattratreya said.