"These foreigners," said the irate, elderly Bangalorean, "they come here and spoil everything." Not since the days when Indira Gandhi, in Stalinesque fashion, routinely blamed the "foreign hand" for all the ills that beset India had I heard foreigners being reviled so comprehensively.

And like Mrs Gandhi, this doughty citizen of Bangalore was holding foreigners squarely culpable for the garden city's rapid descent into urban purgatory.

Bangalore, he elaborated, was just fine till all these foreign investors came along with their demands for cost-effective IT solutions, putting unwarranted pressures on the city. Had Bangalore not become India's Silicon Valley, the city would have been as beautiful and pleasant as before.

It was an interesting comment in a week that saw the India story being so prominently showcased to the cream of the world's investing and opinion-shaping community at Davos. Juxtapose the global event with this local attitude and you get a pretty good idea of the ambivalence that prevails towards economic reform today.

True, economic liberalisation and growth, in which foreign investment has played a prominent role, has made India more visibly prosperous today. But it has also generated its share of new problems and insecurities.

Environmental degradation is one of them; the decline of India's cities is another. As inequalities grow, worsening law and order is a third.

In the absence of any notable public initiatives to stem the decline, multinationals with their mega-investments have proved a convenient alibi to explain all these ills.

Are they guilty as charged? My case is that they are as responsible or irresponsible as our governments allow them to be. So yes, they've crowded into cities like Bangalore, Hyderabad and Gurgaon, putting unprecedented demands on civic amenities.

Should they be held responsible when civic authorities show scant inclination to find appropriate responses to the issue? Would it not be more suitable for urban governments to look at ways of building on the trend they have set in putting India on the global investment map? Should they not look for ways to improve the quality of life to attract more investment like, say, Beijing and Shanghai?

Given that businesses exist to make profit, it is in the interests of their managements to maximise return on investment. Surely, it is the government's responsibility to ensure that such investments maximise the return on prosperity for its citizenry? In Orissa, where tribals are being deprived of adequate compensation for their land as they make way for the big projects, much opprobrium is being heaped on foreign and domestic companies alike for doing tribals out of their rightful due.

The question is: shouldn't the state governments be balancing the interests of its people with the demands of big business?

In Gurgaon, which probably has the highest concentration of foreign business presence per acre than any other city in India, basic amenities such as power, water, roads and public transport are conspicuous by their scarcity.

A world-class private sector exists in what is little better than a moffusil town in this city. Who should be blamed for this - foreign corporations for setting base there or the local authorities for abdicating their responsibilities?

If soft drinks contain contaminated water, as was alleged, is the government not as culpable for lax standards as the manufacturers themselves?

It is not as though public governance needs to become a casualty on the altar of economic liberalisation. The sharp reduction in pollution in the National Capital Region demonstrates how local government, pressured by civil society, can institute pollution norms that protect the health of its denizens without damaging the growth prospects of the automobile industry.

This, in fact, is one of the few areas in which India can actually advise the municipal authorities in Beijing and Shanghai, both of which are covered in a haze of pollution reminiscent of Delhi's pre-CNG days.

Unlike in the earlier years of reform, India is now a sought-after investment destination. With economic growth accelerating as the latest official statistics suggest and a weak civil society, governments not only need to be more vigilant about public welfare, they need to search for solutions that creatively balance the interests of the two.

For instance, no one will deny that it makes little sense to succumb to airport employees' threats against an urgently needed airport modernisation plan. Agreeing to absorb those employees that the private investors do not employ is hardly a durable solution. But in the absence of a public safety net as many other emerging economies are putting in place, the government has little room for manoeuvre.

India's future does not lie in holding foreigners or businessmen responsible for its problems but at looking at ways of maximising their potential to the country's benefit.