May 19, 2014
Abstract: The government can effectively address structural constraints threatening growth through the mission mode. The three critical missions are: food, infrastructure and jobs.
Food mission. To reduce food inflation and match food supply with consumer preference, the government should end unlimited procurement of cereals at guaranteed price, and allow market prices instead to determine supply response. Income security of farmers can be ensured not through procurement, but by addressing issues related to irrigation, power, storage, etc.
Infrastructure mission. Infrastructure bottlenecks have increased, underscoring the need to recognize that infrastructure projects can no longer attract private capital without radical restructuring. Meanwhile, the infrastructure mission must identify and accelerate a core set of projects based on their overall importance to the economy. More government funds will inevitably be needed.
Jobs mission. Reviving manufacturing will be central to this mission. To accelerate manufacturing, infrastructure development, skilling and re-skilling of workers and establishment of a common market for goods and services are key imperatives.
Keywords: growth; structural issues; mission mode; food; inflation; infrastructure; infrastructure funding; jobs