Evidence-Based Policymaking

IN NEWS:

• The absence of Census and Household Consumer Expenditure (HCE) survey data is hindering policymaking.
• India’s census enumeration exercise, which was meant to take place in 2021, has now been postponed to 2024–25.
• Similarly, the results of the National Statistical Office’s Household Consumer Expenditure (HCE) survey for 2022–23, likely to be available by December this year, may now be released only after the general elections in 2024.

WHAT IS EVIDENCE-BASED POLICYMAKING?

• Evidence-based policymaking or data-based policymaking refers to the method of policy development that consults facts and credible, relevant evidence to make decisions over political opinion or theory.
• For example, a policymaker taking this approach may use credible, relevant data to aid the development of a new healthcare policy instead of ideological beliefs.
• Evidence-based policymaking is considered the cornerstone of good governance.

SIGNIFICANCE OF EVIDENCE-BASED POLICYMAKING:

• Targeted allocation of resources:
  • Evidence-based policymaking (EBP) is important for proper resource allocation in developing countries like India, where public resources are often scarce or limited.
  • For instance, the government also uses the poverty estimates to decide on the State-wise allocation of food grains to be sold at subsidised prices through the Public Distribution System.
• Prevent decisions based on vested interests:
  • Evidence-based policymaking can help hold policymakers accountable for their decisions by ensuring that they are grounded in empirical data and research findings.
  • This can help prevent decisions that are based on ideology, personal opinions, or political interests.
• Better policy outcomes:
  • By basing policy decisions on evidence, policymakers can make more informed choices that are likely to lead to better outcomes.
  • Reliable and relevant data provides the government with an understanding of various facets and phenomena across sectors, allowing it to make appropriate policy decisions.
  • For instance, the utility of the consumption expenditure data is not limited to estimating poverty and inequality. These surveys are also used for rebasing GDP and CPI.
• Enhance public trust:
  • Evidence-based policymaking can increase public trust in the government by demonstrating that decisions are based on rigorous analysis and data. This can help enhance the legitimacy of government actions and policies.

CHALLENGES AND CONCERNS:

• Delay in the release of data:
  • Despite having adopted the latest data processing technologies, there has been a growing delay, sometimes by years, in the release of the collected data.
  • This renders such data less useful for policy intervention.
  • The delay also implies less public scrutiny, which undermines accountability.
  • For instance, in an extreme case, the government refrained from releasing the data collected through the Socio-Economic and Caste Census.
• Issue of comparability:
  • For instance, in recent years, the government introduced changes to the estimation of GDP that made comparisons over time impossible.
  • Adjustments to computation and survey methods are always welcome when they are meant to improve accuracy. In this case, the arguments for revision and the revisions undertaken do not improve the quality of the estimates.
  • Some experts claimed that the revisions were driven more by political considerations than by the need to improve accuracy.
• Reliance on multiple surveys and datasets:
  • In the absence of surveys like the HCE survey, reliance on other datasets only increases, and they often send contradictory signals.
  • For instance, with no recent HCE survey, there is little consensus on the trends in poverty and inequality over the past decade.
  • For example, Arvind Panagariya and Vishal More have found that rural poverty saw only a modest rise during the strict lockdown of April-June 2020, declining sharply thereafter. On the other hand, the "State of Working India 2021" by Azim Premji University estimated a sharp increase in poverty during the pandemic.

CONCLUSION:

• Evidence-based policymaking has the potential for high-impact changes in people's lives. Therefore, systemic institutionalisation of EBP is the way forward in the fight to eradicate poverty and improve economic performance, education, health care, and social assistance for millions of people.
• Also, data that is accurate and timely forms the bedrock of policymaking. While postponing the census exercise and other surveys was perhaps understandable in the initial months of the pandemic, the continued delay is difficult to justify.
• The absence of such data also impinges on the ability of policymakers to make well-judged choices.
• Also, measures need to be taken to strengthen the statistical system and safeguard its independence.

PRACTICE QUESTION:

Q. "Evidence-based policymaking is the cornerstone of good governance". Discuss.