Delivering services to aam aadmi

Policy design should worry less about public versus private, and more about choice and accountability.

The most noteworthy aspect of the Aam Aadmi Party's manifesto is the explicit focus on service delivery. This is what its government will be evaluated on, and attention has shifted from the AAP's political success to how it will deliver on these promises. The ideas below reflect learnings from over a decade of research into public service delivery in India, and may be useful to consider as the AAP works towards translating the priorities in its manifesto into specific policies.

One, bringing fiscal transparency. The AAP has revolutionised election financing in India by its transparent approach to fundraising and election expenditure. It now has a great opportunity to do the same for public finances more broadly. It can transform the nature of policy discourse in India by creating a webpage that makes it easy for citizens to drill down into the details of the income and spending of the Delhi government by department, by constituency/ ward and by position in the income distribution (the latter will take some analysis, but is doable).

A simple tool like this can increase the transparency of government spending, improve accountability by building citizen awareness of public spending in their area, and act as an internal compass for the AAP to check whether a proposed policy is going to benefit the true aam aadmi, as opposed to more vocal (and typically better off) interest groups. Such a tool can also elevate the standards of public policy discourse by highlighting the tradeoffs involved in policymaking.

Two, rethinking prices and subsidies. The main objective of subsidies should be to help the poor. But unfortunately, most subsidies in India are highly regressive because a fixed subsidy per unit of consumption leads to a larger fiscal subsidy for those who consume more (who are the better off). If the goal is to help the aam aadmi, a better approach to utility pricing would be to subsidise consumption up to a fixed number of units (at, say, the current consumption of the 80th percentile of users) and to price units above that at market cost. Such an approach is much more pro-aam aadmi and sustainable because economic growth will reduce the subsidy burden as a fraction of revenue. In contrast, a flat subsidy would increase the subsidy bill over time, disproportionately benefit the better off and crowd out resources needed for more pro-poor investments.

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