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The article reviews the state of M&E in South Asia, and makes a case for building capacity in the field, without which the discipline will remain underdeveloped, and accountability for government spending not improve. We suggest that almost none of the South Asian countries have yet managed to develop an M&E ‘system’, though all have mechanisms in place. The article discusses the MIS and evaluation systems, tools in use by governments in South Asia, budgets for evaluation, and the role of civil society organizations. It highlights two cases in South Asia (India and Sri Lanka) where the concept of Performance Management has gathered momentum, even though outcome budgeting has barely taken off in any country of the sub-region. It examines plans for improving implementation of evaluation, but finds many areas suffering from capacity weaknesses. The article closes by recommending ways to address the capacity weaknesses. [ABSTRACT FROM AUTHOR]