"I am delighted to greet and welcome the Hon. Governors and Lt. Governors who have gathered here today.

This is an important conference of extremely important Constitutional functionaries. I wish to begin by emphasizing the importance of these deliberations. Each one of you has been charged with great responsibility at a critical time in the evolution of our democracy, and in the development of our polity and our economy.

India stands today on the threshold of a new beginning. There is unprecedented self-confidence in our people that we can overcome the constraints on our development. I have often said that the world wants India to do well, and our challenges are mainly at home. With each passing day this is becoming clearer. The recent decision of a diverse group of 45 countries belonging to the Nuclear Suppliers Group to extend to India special and exclusive treatment in the field of nuclear energy is proof again of this benign global environment.

India's emergence as a modern, secular, plural, democracy is being welcomed the world over. Our successes in reducing poverty, ignorance and disease within the framework of an open society and an open economy, with Constitutionally guaranteed fundamental rights and the application of the Rule of Law are viewed with respect and admiration all over the world.

In the past four years we have witnessed an unprecedented upsurge in the creativity and enterprise of our people. Our economy has grown at an average annual rate of 9 per cent during the last four years. In the current fiscal year, growth prospects may be affected by the global economic slowdown, the steep rise in international prices of petroleum products and other primary commodities. Even then, the overall growth rate of the economy will still exceed 8 per cent, making India the world's second fastest growing economy.

Our effort has been to make our growth process more inclusive, both socially and regionally. Good performance in agriculture is especially necessary for this to happen. We have taken a number of initiatives in the agricultural sector and I am happy to say that our efforts are showing good results. After a decade of stagnation, the agriculture sector is reviving. The rate of growth of this sector has averaged 3.5 per cent in the last four years as compared to the growth rate of 2 per cent in the six years of the previous government. We have launched the Rashtriya Krishi Vikas Yojana and the National Food Security Mission. The latter is especially targeted to attaining food security. Agricultural loans of about Rs. 70,000 crore have been waived to help our farmers. There has been a record procurement of about 225 lakh tonnes of wheat in Rabi season 2007-08. The procurement of rice in the kharif season 2007-08 has also risen sharply from 246 lakh tonnes to 267 lakh tonnes. Available indicators suggest that we are entering a decade of rising commodity prices, particularly in the case of foodgrains. It is therefore highly important that India should pay adequate attention to self sufficiency in foodgrains.

In the current fiscal year, inflation has emerged as an important concern of public policy. The reasons for the sharp increase in prices are to be found in the steep increase in import prices of petroleum products and other commodity prices. Government has adopted several measures to control inflation and to protect the poorer sections against the adverse effects of rising prices. Despite a significant increase in procurement prices, we have kept the issue price of wheat and rice unchanged under the Targeted Public Distribution System. This is to protect the vulnerable sections of our society against inflation. We have also kept the price of kerosene unchanged with the same end in view. I would urge Governors to advise their Chief Ministers on the importance of streamlining the Public Distribution System, especially for the poorer sections of our society.

I am aware that for the common man, inflation is a major problem. We are doing our best to control the inflationary trend, and especially to protect the poor from its adverse impacts. There are signs of moderation in the high inflation that we have witnessed recently. We are confident that the situation will improve further in the coming months because of the measures that we have taken. State Governments can assist in the control of inflation by keeping a strict watch on the activities of hoarders and unscrupulous traders.

If the world wishes to work with India, cooperate with India, trust India and invest in India, it is because the world recognizes that the people of India are on the move. But there is much that we have to do. In the past four years, it has been the effort of our Government to increase investments in the capabilities of our people - in their education and skill building, in their health and well-being, in the infrastructure of a modern economy, in the future of our young people.

This is the objective of the programmes we have launched. Like Bharat Nirman, Sarva Shiksha Abhiyan the National Rural Health Mission, the Jawaharlal Nehru National Urban Renewal Mission, National Rural Employment Guarantee Programme, the extended Mid-Day Meal Programme, and so on.

Our "New Deal for Rural India" is unleashing a new phase of rural development in our country. The National Rural Employment Guarantee Programme which now covers all the rural districts of India will help to soften considerably the harsh edges of extreme poverty. I urge Governors to take special interest in the effective implementation of this programme.

We have stepped up investment in infrastructure - in roads, railways, power, irrigation, telecommunications and civil aviation.

Each of these programmes and each of these initiatives needs to be implemented well to be successful. Their effectiveness depends a great deal on the capacity and energy of the State Governments. The ability of the State Governments to maintain law and order, to deal firmly with terrorism and communalisation of our polity and pay adequate attention to delivery system for basic social services like education and health will be a crucial determinant of the degree of success achieved by our development programmes.

Unless we improve the efficiency of administration at the State and District level, unless State Governments can stand and deliver, our plans and our financial allocations will remain paper allocations. This challenge is altogether more severe in the less developed States, in the States of the North-East region, in our island UTs and in Jammu & Kashmir.

As a representative of the Union in the State and UTs, each one of you can make a difference. You can encourage our State and UT Governments to improve the quality of governance, the efficiency of administration and the vitality of the Panchayati Raj institutions at the grassroot level."

There are new challenges that we face today. The challenge of climate change is one of them. There is now global consensus on the need for a comprehensive response to this challenge. India, on its part is committed that it will not increase its per capita emissions of Green House Gases beyond that of developed countries. We have formulated a National Action Plan so that our response can be focused and coordinated at the national level. It is important to recognize that addressing the problem should be one of our highest priorities. We will implement our National Action Plan through 8 missions which would cover the areas of solar energy, energy efficiency, sustainable habitat, water, the Himalayan eco-system, green India, sustainable agriculture and strategic knowledge for climate change. It is expected that the missions will become operational within a year. Their success will depend greatly on the ability of Central and State Governments to coordinate their activities.

The Governor in our scheme of things is also the Chancellor of many Universities at the State level. This is an important function of the Governor and an area of responsibility in which you can truly make a difference. Our Government has launched a series of initiatives in the field of higher education, for increasing opportunities in the field of higher education and for improving its quality. Quantitative expansion is easier to handle, though here too we face hurdles such as availability of teachers. Qualitative development is more difficult to ensure.

I would like our Governors to pay particular attention to the qualitative development of our Universities. I would like every one of our Universities to aspire to global best standards, in terms of students, teachers and infrastructure. University administrations have to be reformed, and university systems modernized. A mere increase in outlays will not ensure better outcomes without good leadership. That is where you can play an important role. I urge you to do so.

The President of our country has given a clarion call to make female literacy the touch stone of our efforts towards gender equality. We have made progress in this area though performance across States is quite uneven. I would urge Governors to persuade the State Governments to give this area their priority attention. We have already heard the Minister of Women and Child Development about the initiatives taken by the Central Government for the empowerment of women and for combating social evils like child marriage, female foeticide etc. These initiatives need to be taken forward. India has the largest number of women elected leaders in the world. There are about 12 lakh women who have been enabled by the 73rd and 74th Constitutional amendments to move out of the confines of their homes into the public sphere. We should take advantage of this welcome development. I would request Governors to inspire this new leadership to play a catalytic role in improving the status of women and empowering them.

Naxalism and Left Wing Extremism continue to pose a challenge to development and the social and economic uplift of people in some of the most backward regions of our country. The States of Chhatisgarh, Jharkhand, Bihar and Orissa figure prominently in the list of areas that are affected. What is especially disturbing is the extent to which these extremists have improved techniques and the kind of improvisations that they have succeeded in making. Left wing extremists also appear to have a ready-made pool of disaffected elements, mainly from the tribal and other very poor sections of the society. The problem has acquired such scale in some regions that it cannot be dealt with by individual state Governments. We need better coordination between State Governments. We also need better coordination between States and the Centre.

Without peace there can be little development. We need an integrated approach that addresses both the challenges of maintaining peace and security for our people and providing livelihood security and promoting development.

I had convened a Chief Minister's Conference on this issue. A Task Force has been set up under the Chairmanship of the Cabinet Secretary to promote coordinated action across a range of development and security activities so that naxal problems in the affected areas can be tackled in a comprehensive manner.

To deal with the challenge, many States have set up specialized and dedicated forces. However, many State police forces remain under-staffed, ill-quipped and poorly trained. The Central Government has, on its part, sanctioned 15 additional battalions of the Central Reserve Police Force and created 10 specialized Command Battalions for Resolute Action which are trained in jungle welfare. It has also been decided to give financial assistance to State Governments to raise India Reserve Battalions. The command and control mechanism of the Central Police Organizations is being streamlined and the intelligence machinery of the Centre is being strengthened. We are also giving special attention to modernization of State Police Forces and their training.

It is not a coincidence that the areas affected by naxalite activity are also areas with a large representation of tribal communities. It was in recognition of this fact that many such States and areas have been included in the Fifth Schedule of the Constitution. This provides for a special role for Governors. Our Government has enacted the Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, which is a path breaking initiative empowering tribal families. The efficient and effective implementation of the provisions made in this Law needs close attention and monitoring. I hope Governors will take particular interest in this matter. We have also been paying special attention to the challenge of development in Jammu & Kashmir and the North-Eastern region. Our focus has been on investment in connectivity, in education and in infrastructure development. In Jammu & Kashmir we have placed special emphasis on infrastructure development. We must not lose focus of the development priorities in these States, even as we seek to deal with law and order and internal security challenges.

There had been a marked improvement in security in Jammu and Kashmir in recent years. The development packages announced from time to time, totaling to about Rs. 25,000 crore, the Round Table Conferences that were organized, the process of consultation with diverse sections of the people and the various confidence building measure had all contributed to this outcome. The recent controversy relating to the temporary allotment of land to the Amarnath Shrine Board has offset some of the gains that we had made. The situation is still fragile and needs careful handling.

In the North East, the levels of violence have come down in most States. In Nagaland the fighting between two factions of NSCN has led to increased killings. Talks with NSCN (IM) have not made any significant progress. The situation in Manipur and certain parts of Assam will also need careful handling. Overall there is room for optimism, but the activities of 50 to 60 underground outfits of different persuasions in the North East leave no room for complacency.

The serial blasts in Delhi four days back (September 13) and in Jaipur, Bangalore, Ahmedabad and Surat earlier are grim reminders of the internal security challenges that we face. Terrorism to-day is an ubiquitous global phenomenon and we are among its major victims. Terrorist outfits currently employ a variety of new skills and techniques - and also carry out suicide missions - which have resulted in their attacks becoming more devastating. The thrust, to-day, is on causing 'mass casualties' and most attacks take place where there are large congregations of people as in bazaars, malls, shopping places and mass transportation systems like commuter trains. Terrorist targets also include critical infrastructure and high profile economic installations.

There are many commonalities among the five or six recent blasts - the nature of the explosives used, the triggering mechanisms employed, the placement of explosives, etc. This suggests that the modules responsible are closely linked to one other. The role of Pakistan based terrorist groups can not be minimized but the involvement of local elements in recent blasts adds a new dimension to the terrorist threat. We have reports that certain Pakistan based terrorist outfits are constantly seeking to set up new terrorist modules within our country. This is a matter of utmost concern. We have increased vigilance on our borders. Coastal security is being tightened. But in view of the growing involvement of local elements, this is not enough. Our Security and Intelligence Agencies have, no doubt, been successful in thwarting and pre-empting several terrorist attacks, but as the recent blasts in Jaipur, Bangalore, Ahmedabad, Surat and Delhi indicate, there are still vast gaps in intelligence. These need to be overcome.

Several steps have been taken to improve both policing and intelligence, but a far greater effort is called for. The strength of the Civil Police Force needs to be greatly augmented. Greater emphasis will have to be paid to intelligence - both by the Central Intelligence Bureau and the Intelligence Agencies in the States. The involvement of the public has to increase, and the public made more alive to the danger of bomb threats and random placement of IEDs. This will need a massive people-to- people effort. Use of Closed Circuit TVs in areas where there are large congregations of people will need to be mandated. Greater use of technology, particularly relating to the detection of explosives and interception of Internet traffic will be required.

Let me take this opportunity to say, with the fullest emphasis, that there is no question of the Government being soft on terrorism. The issue is really one of examining the efficacy of the totality of the systems and the mechanisms that we have to deal with terrorist incidents.

The public debate on the issue of terrorism has, unfortunately, tended to get driven by politics, and has centered on certain laws enacted or repealed by Governments of different political persuasions. Our Government has no fixed, inflexible or ideological view in this regard. We have in fact taken the initiative to strengthen various laws like the Prevention of Money Laundering Act. We are actively considering legislation to further strengthen the substantive anti-terrorism law in line with the global consensus on the fight against terrorism.

The issues in contention, in the ongoing debate, basically relate to the procedural aspects of investigation and prosecution of terrorism related offences. Even this aspect is under consideration with the aim of identifying provisions which could be made to further strengthen the hands of the law enforcement agencies, and also, simultaneously, address the apprehensions which led, first to the repeal of TADA, and later of POTA, and about which there are cross party views which cannot be ignored.

A number of practical suggestions are on the table for tightening the machinery to deal with terrorism. One suggestion is to set up a Central Agency to investigate and prosecute all terrorist incidents. This need not necessarily be a Federal Investigative Agency, but could be a Central Agency which can assist the States in investigation whenever a major terrorist event takes place. As this Central Agency would have investigated other similar terrorist crimes in the country, they would have a great deal more of expertise in regard to the investigation and prosecution of such terrorist offences.

Another suggestion that has been made is about establishing a Central Agency to co-ordinate Counter-terrorism strategy. There are already a number of Central Agencies who are involved in determining Counter-terrorism strategy, based on extant situations. Perhaps, there is no need to set up a new Agency, and instead we ought to ensure better coordination and integration among the existing Agencies for devising an effective Counter-terrorism strategy.

Most important of all, to my mind, is closer cooperation between the Centre and the States and among the States themselves. This is particularly important to-day when as we have seen, there is a common strand running through each of the major terrorist incidents. I would welcome your suggestions for devising a more effective counter terrorism strategy.

Finally, I would like to point to the growing concerns and perception among the people at large about the dilution of the writ of the State.

It is a matter of serious concern that dissent and agitations, over any kind of issues, have been increasingly finding expression in mindless destruction of public property, attacks on police posts, and other Government establishments. I am constrained, and feel sad, to observe that all this is not in the national interest and will hurt our progress. In colonial times public property was a symbol of colonial power. Today it belongs to the tax-payer, to the same people who in a state of motivated frenzy, egged on by partisan interests, seek to destroy it.

This is a matter of the utmost concern, and calls for the most serious introspection at the national level. Increasingly, these types of outbursts are found to be centered on identity-based issues. At a time when the world looks upon India as a rising power, the Indian State can not be allowed to become so diminished that it cannot even protect public property. We have decided to call a meeting of the National Integration Council next month in which, I hope, we will be able to frankly and sincerely discuss some of these issues and reach a national consensus.

Let me end by urging you to reflect on these issues and show the way forward in your respective States. I am sure that your knowledge, wisdom and experience can help in a big way in meeting the various challenges that our country faces today. I am confident that through your efforts the office of Governor will acquire a new standing in the eyes of the people. I wish all of you all the very best."