He also said public sector companies were the "biggest" rule violators but get away with it because of a "complex system" of governance.
The former Union minister, however, did not elaborate on what those violations were.
He made the remarks during a panel discussion at the first National Consultation on Environmental Health, organised here by Public Health Foundation of India and Tata Institute of Social Sciences on World Environment Day.
"We are the world's best planners. Let me tell you, there is no country in the world that has produced the plans that we have produced. Having been guilty of that, I can tell you authoritatively, we are (also) the worst implementors," he said, in response to a query on the government's policy implementation.
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"It (plan implementation) is really a complex issue and I don't think we can really resolve it," he said, adding, "But the ability of the government to implement their plans is highly overestimated by the public".
"Look at the way we implement public hearings," he said, adding there was no proper system of getting feedback from the public on any project.
"By the way, the biggest violators are public sector companies, government companies who somehow doctor the public hearing process and as a minister I turn a blind-eye saying 'humara hi company hai' why should we penalise it... It's a very complex issue," he said.
"The other issue is, are there any disincentives for non-implementation? No, we don't have any disincentives for non-implementation, neither do we have incentives for implementation," he said.
The Congress leader noted that policy implementation was easier for "closed systems", as he hailed the Indian Space Research Organisation (ISRO) as the best example of an indigenous agency executing plans.
"If you are a closed innovation system, you implement. For instance, ISRO is the best example. A first grade example of great planning, great implementation. Because it's a closed system, it gets the money, it gets the human resources, no questions are asked and they go ahead and implement.
Ramesh was chairing and moderating a discussion titled 'Environmental Health in India - the Present and the Way Forward' which included Manoranjan Hota, Advisor, Ministry of Environment, Forest and Climate Change, V M Katoch, ex- Director-General, Indian Council of Medical Research (ICMR), K J Ramesh, Director-General, India Meteorological Department, and Shyamala Mani, Professor, National Institute of Urban Affairs, as panelists.