Economic Survey 2019 suggests changes in behavioural strategy in flagship schemes

The Economic Survey 2019 suggested on Thursday the government must tweak its strategy for improving the efficacy of its marquee programmes from the Swachh Bharat Mission (SBM) to Beti Bachao Beti Padhao (BBBP) and from “Give it up” for the LPG subsidy to “Think about the Subsidy”.

It suggested that “behavioural techniques can help achieve desirable outcomes from subsidy programmes and in turn reduce the effective costs of subsidy.”

In a chapter, Policy for Homo Sapiens, Not Homo Economicus: Leveraging the Behavioural Economics of “Nudge”, it outlines “an ambitious agenda for behavioural change”.

“Given our rich cultural and spiritual heritage, social norms play a very important role in shaping the behaviour of each one of us. Behavioural economics provides the necessary tools and principles to not only understand how norms affect behaviour but also to utilise these norms to effect behavioural change,” it said.

“The Survey, therefore, lays out an ambitious agenda for behavioural change by applying the principles of behavioural economics to several issues including gender equality, a healthy and beautiful India, savings, tax compliance and credit quality.”

From displaying the names and photographs of people who give up subsidy as “scroll of honour” to simple things like a mobile phone app or physical kiosks will improve the schemes’ efficacy and ‘nudge’ people towards desirable behaviour, according to Economic Survey 2019.

“For campaigns like “Give It Up”, the default choice matters immensely. People have a strong tendency to go with the status quo. The default option can be modified so that households above a certain income threshold have to opt-in to continue their subsidies with the default option being “opt out” of the subsidy,” it said.

The Economic Survey said it was critical to ensure that people find easy methods through only a text message, a phone call or a few clicks to opt-in to continue their subsidy.