Data-driven feedback loops are likely to be the biggest change in public policy making in the years to come
Finance Minister Nirmala Sitharaman tabling the Economic Survey in Parliament. PTI
India’s Economic Survey 2021-22 is peppered with arguments, charts, and tables about the return to growth of one of the world’s most important economies after the COVID-19 pandemic.
But beyond the statistics on growth in agriculture (less affected by the health crisis than, say, services), the strength of foreign currency reserves, and even night-time illumination levels as a marker of economic activity, there is a deeper message from the Survey. This message is in the use of data, often real-time data, in public policy responses in the country.
Public policy making has always been urged to create ‘feedback loops’ or responses gathered and analysed from the people whose lives are affected by these policies. The question though has been time-lag — or how long would it take to gather and study these responses, and by the time this process was completed, would it be too late for any remedial measures, if needed?
This is why economic forecasting or modelling has often taken precedence over information gathered via feedback loops. But India’s Economic Survey makes the argument that the country’s economic response to the COVID-19 pandemic had the benefit of real-time data upon which it could be calibrated rather than more nebulous advice from economic modelling.
The Survey says, “While some form of feedback-loop based policy-making was always possible, it is particularly effective at a time when we have wealth of real-time data. Over the last two years, the government leveraged a host of High Frequency Indicators (HFIs) both from government departments/agencies as well as private institutions that enabled constant monitoring and iterative adaptations. Such information includes GST collections, power consumption, mobility indicators, digital payments, satellite photographs, cargo movements, highway toll collections, and so on.”
The Survey, thus, is a public reaffirmation using a high-profile government document of what is colloquially argued these days, that India is data rich. With one of the cheapest rates for data in the world, and ubiquitous smart phone use among its 1.4 billion people, in a democratic set-up, India generates enormous amounts of data every day in every sphere of life.
The potential of this data is increasingly being tapped — in everything from healthcare to urban transport streamlining. The national government think tank, NITI Aayog, is working to create a National Data and Analytics platform. And data use lies at the heart of new endeavours from citizen identification to health and land record upkeep.
The Economic Survey argues that it is because of the wealth of real-time data that the country’s economic policymakers had access to that it could break away from nebulous forecasts to actually measuring impact and responding immediately literally fortnight to fortnight during the pandemic.
It uses the words ‘waterfall’ versus ‘agile’ to compare these two approaches. A waterfall approach would have been to flood the system with cash hoping that it would take care of the crisis whereas agile suggest that cash and other benefits/subsidies were inserted and targeted at areas and groups which were most vulnerable, constantly accepting and responding to feedback from the ground, and thus changing tracks frequently as per need.
The push towards real-time data use in public policy is set to grow in India. The country is still in the initial phases of understanding how data can be used, especially during a crisis.
This is critical for the future of policymaking in India because it will dramatically reduce the power of systemic arbitrage — this phrase is best understood by an anecdote which has often been used by NR Narayanamurthy, one of the founders of the Indian information technology major, Infosys, “In God we trust, but everyone else brings data to the table.”
Data-driven feedback loops, therefore, are likely to be the biggest change in public policy making in the years to come as empowered citizens realise that they are generators of data, and their feedback matters more than ever.
Indians are famous for being vociferous with their opinion and feedback on all kinds of things on Twitter — and cascades of such opinion have often altered some local level government decisions. This process is now going to become far more sophisticated and defter — gathering information about how people use or reject policy and tweaking funds and legislation accordingly. Thus, the potential for policy to be reimagined as a less static thing exists in abundance.
We will keep trusting God, of course, but on the ground, data will be king.
The writer is a multiple award-winning historian and author. The views expressed are personal.
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