India need s to improve public distribution system to bring down essential commodities prices and also to ease supply constraints, country’s central bank said. Reserve Bank governor D Subbarao said States have an important role to play in this.

States could, for instance, help better manage public distribution system, improve productivity in agriculture and allied activities, reform the functioning of Agriculture Produce Marketing Committees (APMCs) and improve the infrastructure, such as, storage facilities, Subbarao told a conference of state finance secretaries here.

There is also a need to improve the efficiency level of states in managing funds, in terms of better planning, cash management and adherence to fiscal discipline, the governor said. Besides improving revenue collections through tax reforms, the states should also focus on expenditure management, he said.

On the agenda of financial inclusion and financial literacy, the governor said there was a need to improve the effectiveness of state level bankers committee (SLBC). The attempt should be to move from a target driven approach to more meaningful financial inclusion, he said. The states, in collaboration with the RBI, banks and the central government can play an active role in this, he said.