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Policy Effectiveness Index

07 April 2014
Simply Decoded

India Public Policy Report, 2014, released by the Oxford University Press, measured for the first time state-level performance of policy effectiveness and its impact on growth. The report revealed that in the policy effectiveness index Gujarat showing a marked decline dropping from 11th position in 2001 to 16th in 2011. Except infrastructure development, Gujarat has been found lagging behind on most other parameters.

On Gujarat’s deterioration in rank, Abhijit Sen, member of 14th Finance Commission who released the report, said: “This was due to the infrastructure index. This happened not because Gujarat did poorly on infrastructure but because other states, which had poor infrastructure to begin with, showed marked improvement.”

Along with Gujarat, Kerala was another surprise — having slipped from 24 to 29 during the 1981-2011 period.

While states like Jammu and Kashmir and some other small states have improved their rank considerably, the top five and the bottom three states in the ranking have, by and large, remained the same over the three decades of the analysis presented in the report.

The top five states on the policy effectiveness index (PEI) in 2011 are Sikkim, Mizoram, Goa, Punjab and Delhi. At the bottom of the table are Odisha, Bihar, Madhya Pradesh, Assam and West Bengal.

PEI is a multi-dimensional and a multi-indicator measure and comprises four component indices that reflect human well-being from being able to enjoy: livelihood opportunities; a socially meaningful life; security of life and rule of law; and amenities for a sustained improvement in living standards

The report, compiled by Rajeev Malhotra, executive director, Centre for Development and Finance, Jindal School of Government and Policy (JSGP), observed that geographically smaller states performed better than larger ones, although they offered lesser employment opportunities compared to the larger ones.

It further said that states which have been bifurcated from a bigger state were found to be doing consistently better than their parent states. Significantly, Chhattisgarh and Jharkhand were found to be performing better than Madhya Pradesh and Bihar respectively.

The analysis undertaken for the period 1981 to 2011 provides evidence for some commonly made observations on India’s development process and some other less recognised outcomes. The IPPR finds that at the all-India level there is a gradual, but only a marginal, improvement in the policy effectiveness index over the three decades. It is being compromised by a near stagnancy in expansion of livelihood opportunities and deterioration in law and order and justice dispensation environment in the country.

The IPPR was a first of its kind report that sought to create an independent platform for bringing together state-of-the-art policy, research and analysis on issues of policy relevance of India.