This paper makes an attempt to present an alternative model for urbanisation and associated infrastructure provision by the state. Existing wisdom that has long emphasised a diminished role of the state, and an unfettered operation of market forces ignores the many imperfections that may exist. But, in this innovative approach that has worked so far in the New Town of Kolkata it is possible to bring together an 'activist' state and market-oriented efficiency, while keeping intact at the concerns for the poor, many of whom have been offered a chance to take part in the construction activities and their views actively solicited during the rehabilitation work.