Government’s failure is now much more pervasive than market failure. Personal economic incentives are as, if not more, important than moral prescriptions or social strictures. In too many places government is part of the problem and not part of the solution. We must recognize the strength and weakness of the people and the state and allow and encourage each to play its role in economic and social development.To the extent the state has usurped the democratic rights/power of the citizens, power must be restored to the people and former made accountable to the latter. The view of the government as a ‘milch-cow’ or a ‘mai-bap sarkar’ must be replaced by a more self-reliant public that acts as a watchdog on the government. This paradigm sets three goals for the state to ensure: employment, entitlement and empowerment.