Distributive policy

Looming Challenges in India’s Public Policy

Adam Smith in The Wealth of Nations (1776) introduced the concept of the “invisible hand” where he believed that “the market as by an invisible hand will promote the welfare of all”.

When socialism took firm root in the USSR as an alternative ideology, Hayek wrote in “Road to Serfdom” that when individual planning is replaced by central planning, economic efficiency and freedom will become the first casualties. The disintegration of the USSR in 1991 proved that its prognosis was prescient.

However, the omnipotence of the market mechanism received a severe shock when the United States experienced an economic collapse in 2007-08, with a contagion effect. Nobel Laureate Professor Joseph Stiglitz pointed out in his book ‘The Price of Inequality’ how market forces only help the unscrupulous few, due to a deadly cocktail of ‘bad regulation by the government, information asymmetry and conflicts of interest”. Brexit (2016) has clearly shown how when public policies attempt to advance the interests of the elite while neglecting the poor, it can backfire.

As India is on the road to freedom, it would be interesting to analyze how India’s public policy has unfolded in its quest for socio-economic and distributive justice, mandated by the Indian Constitution. For Nehru, centralized planning on the model of the USSR’s GOSPLAN can be transformational. PC Mahalanobis was its intellectual and statistical architect. Now that the Planning Commission has been dismantled, it would be useful to recount how a robust evaluation mechanism for our mega programs has been set aside in the attempt to erase the Nehru legacy.

A strong policy evaluation mechanism is a prerequisite for sound public policy. India was one of the first nations to have a specialized independent body in the form of a Policy Evaluation Organization (PEO) which was established in October 1952, with a specific task of evaluating community development programs and other intensive area development programs. PEO’s independent work has become very effective in evaluating government programs and policies and recommending corrective action through feedback.

Pitambar Pant, the civil servant created the Outlook Planning Division, using sophisticated econometric modeling. Forward planning, evaluation, and the Central Organization of Statistics were the culminations of robust public policy under the benevolent gaze of Mahalanobis, Pant, and Nehru.

However, while the structure of the PEO became more robust during the first and third five-year plans, it began to decline after 1969 with the consolidation of power by Indira Gandhi. From the mid-1980s to the liberalization of the economy, policy evaluation regained its lost momentum. However, there was a crucial difference between the characteristics of the evaluation before and today. Whereas previously the PEO focused more on the “merits” of the program or policy, the emphasis is now on the “value” of the program.

Merit refers to the intrinsic value of a program; its effectiveness in meeting the needs of direct beneficiaries. On the other hand, value refers to the extrinsic value for people outside the program, for example for the community or society at large. Take the case of MGNREGA. This social assistance program that puts recipients to work has merit for those moving out of poverty. So while MGNREGA is a ‘meritorious’ program primarily aimed at unskilled rural job seekers, demonetization has a more ’empowering’ aspect, as it has helped create the perception of an attack on corruption.

Policy design and evaluation are a cyclical process and the two go hand in hand. According to the principles established by the Development Assistance Committee (DAC) in Paris (1991), there are five evaluation criteria, namely relevance, effectiveness, efficiency, impact and sustainability. Similarly, policy design is also a very thorough and comprehensive process that involves eight major steps with constant stakeholder consultation. The policy design identifies a potential “need”. If there is no need or requirement among the beneficiaries, the policy will not be accepted and adopted and is doomed to failure.

For example, the Farm Bills have faced fierce opposition in the Punjab and Haryana regions. This is because the mandi system is well developed here and people don’t “need” to be manipulated. On the other hand, mandi is rare in Bihar and farmer’s need for market creation might be more acceptable to farmers in these areas. Identification of potential need is followed by completion of a needs assessment and then a search for potential programs to fill the need is conducted. An evidence-based design is selected and the program is developed to meet stakeholder needs, followed by pilot project execution and policy roll-out. Program progress should be constantly monitored at every stage and evaluated to generate feedback on required changes. It is within such a broad framework that a policy is designed to remedy the failure of coordination and meet the needs of the collective with constant monitoring and evaluation at regular intervals.

However, the design of policy which requires such deep analysis and reflection before being put into action is being undermined in the Indian Parliament. Last year during the monsoon session, 20 bills were passed in both Houses of Parliament, either without discussion or at a minimum, limited to Treasury Bench MPs speaking on the legislation. Parliament tabled 10 bills of national importance in 97 minutes, or 9.7 minutes for each bill on average. Now, it can be argued that the efficiency or productivity of Parliament has increased, leading to an increase in its “value”. However, with blatant disregard for standard procedures, the “merit” of these passed bills or how useful they would be to beneficiaries is a big question.

As India enters its 76th year of independence, Nehru’s ‘Tryst with Destiny Speech’ is remembered where he recounted Gandhiji’s mission to ‘wipe every tear from every eye’. By winding up the Planning Commission, we have thrown the baby out with the bathwater and set aside the importance of planning, evaluation and accountability. The Constitution states that it is the “duty of the state to raise the standard of nutrition, improve the standard of living and improve public health and to “endeavour to minimize inequalities of income”. The NFHS V report shows how 35% of our children are stunted due to prolonged deprivation of reasonable nutrition and poor sanitation and the percentage of children with anemia has dropped from 53 % in 2015-16 to 57% in 2021. This despite Mukt Bharat Campaign anemia. The income of the richest 10% as a percentage of national GDP has fallen from 41% in 1991 to 57% and the poorest 50% has fallen from 23% to 17% in 2021. , and prioritizing speed over Compared to the comprehensive analysis by Parliament, India’s supreme public policy structure has become very fragile. Clearly, public policy must pay greater attention to actualizing the constitutional mandate of socio-economic justice, ensuring access to quality education and health care for all, and stemming the tide of inequality. growing.

(Dr Misra is Professor Emeritus, KIIT University, Bhubaneswar and Kishore holds a Masters in Public Policy and Governance, OP Jindal Global University, Sonipat)