Economic Survey on Behavioural economy

By jatin July 5, 2019 12:11


  • Economic Survey says the govt should use insights into behavioural economics from Nobel Prize winner Richard Thaler to meet policy goals

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  • The Economic Survey 2018-19 has favoured detailed application of ‘behavioural economics’ as an instrument of change in India where social and religious norms play a dominant role in influencing behaviour.
  • This is based on the premise that decisions made by real people deviate from the impractical robots theorised in classical economics. “Drawing on the psychology of human behaviour, behavioural economics provides insights to ‘nudge’ people towards desirable behavior,” says the Economic Survey
  • By analysing the successful behavioural change effected by the Swachh Bharat Mission and the Beti Bachao Beti Padhao campaigns, the Survey incorporates their learning and lays out frameworks for integrating behavioural economics into policymaking in various contexts.
  • Survey lay 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.
  • Behavioural insights can be leveraged to transform the tax culture from one of tax evasion to tax compliance.
    • This would then provide the necessary revenues for investments in both the hard infrastructure of roads, ports, railways, etc. and the soft infrastructure of skills and education

By jatin July 5, 2019 12:11