The mandate received by the new government gives it an opportunity to set a long-term agenda without political threats. This is exactly what any government would have required if it were to come to grips with the structural issues that now threaten the Indian economy's growth prospects.
Of all the many problems that can be put on a priority list, I believe that three are most critical. No attempt to put the economy on a higher growth trajectory will succeed unless these three problems are solved.
Further, they are issues that cut across several jurisdictions, which means meaningful solutions will require intense co-ordination. They are best addressed through the mission mode.
The food mission
The most visible symptom of the problems in the food economy is the persistence of food inflation. The objective of the mission must be to bring down the rate of food inflation quickly and sharply.
A number of factors have contributed to this unhappy situation, but at their core is the incentive framework within which farmers work. This has its origins in the compulsions created by the cereal shortages of the 1960s.
The Green Revolution worked relatively well in dealing with the problem back then, but its legacy was to make the government the de facto consumer, thereby pushing households out of the picture.
Text: Subir Gokarn, Business Standard
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