India must put in place a structure of regulatory policies that will prevent "potentially damaging behaviour" but not restore the "licence permit raj" in the country, Prime Minister Manmohan Singh said here on Thursday.

Addressing the inaugural of the Delhi Sustainable Development Summit (DSDS) here, Manmohan Singh said incentives for sustainable development must encourage economic decision makers to act in an environmentally benign manner. "The solution lies in two dimensions. First, we must put in place a structure of regulatory policies which will prevent potentially damaging behaviour. This is what we do by setting regulatory standards and enforcing them. I must emphasise that standards are not enough. "They must also be enforced which is often difficult.

It is also necessary to ensure that these regulatory standards do not bring back the licence permit raj, which we sought to get rid of in the wake of economic reforms of the early 1990s," he said. "Second, we must deal with residual pollution that may be caused despite regulatory efforts. The principle that should be followed in such cases is that the polluters must pay. This will discourage the polluters and also provide a means of financing the corrective steps necessary to counter the pollution caused," he said.

The prime minister said India was trying to do this by setting appropriate standards in several areas, especially in the most energy using industries. "As a general rule we are trying to establish the principle that the polluter must pay though that is much more difficult to achieve."

He emphasised on the need for capacity building at the local level and said India was trying to restructure the implementation of development programmes to strengthen local bodies and empower them. “The growth in environmental awareness and the capacity to manage local environmental problems is a very positive development. However, local or national action would be of no avail when the externalities cross natural boundaries, as in the case of climate change.” he said.

On the global front, Manmohan Singh said India would continue to play a constructive and responsible role in the climate change talks and work with others to find practical, pragmatic but equitable solutions. "Our view has been that those who have been primarily responsible for the build up of greenhouse gases and who also have the greatest capacity to act to bear the brunt of the responsibility. Developing nations are obviously much less culpable, and have much greater need for continued growth. These countries should be helped to achieve sustainable development paths," he said.

The climate change talks in Mexico in 2010, he said, did not resolve the problem but did produce some modest result. "India particularly welcomes the agreement on the setting up of a framework of technology innovation centres under the UNFCCC (UN Framework Convention on Climate Change) to foster local adaptation and mitigation measures," he said. “I would also like to emphasise that even as we wait for meaningful agreements on global mitigation action, we in India have committed ourselves to keeping our per capita consumption below the average for the industrial countries,” he said. The prime minister said India has set a broad objective to reduce the emissions intensity of GDP by 20 percent between 2005 and 2020.

He said India was engaged in preparing the Twelfth Five Year Plan, to cover 2012-17. It would focus on specific initiatives needed to put the country's development on a path consistent with low carbon growth, energy efficiency and exploitation of renewable energy sources. The summit is the first major global meeting after the Cancun climate summit of December 2010. The theme of the three-day meet, organised by The Energy Research Institute (TERI), is tapping local initiatives and to tackle global inertia.