A priority order for our SDGs can prove effective and win followers

The truest indicator of the success of any intervention or policy is its focus on turning limited resources into something that gives a high return on investment. Given the current global economic turmoil, it is imperative to look at the quality of public expenditure. For developing countries, an absence of the government’s will to prioritize may lead to a situation where administrations try to do everything but achieve little. Inherently, this is what has happened with the world’s Sustainable Development Goals (SDGs).

While setting up targets at the United Nations, often, attempts are made to broaden the range of issues. Too many goals often translate into too few results. In our last column in these pages, on 3 October (bit.ly/3GrK4Cu), we empirically showed how the world is way behind its 2030 targets. The world will be able to achieve its SDG 2030 promises only by 2078. While there are 17 SDGs, governments around the globe are supposed to focus on 169 indicators. It effectively means that there are no priorities. The developing world, which has budgetary constraints, cannot set aside resources to act on all these 169 indicators simultaneously.

Therefore, it is prudent for governments to have a segmented goal-setting process. Note that this does not imply the schemes addressing other targets will not be dealt with. It just means that the most effective policies get most of the additional attention. Empirical evidence suggests that if a country spends a rupee evenly across 169 indicators, it will be able to deliver ₹7 of social benefits. Whereas, if countries prioritize their spending on the 40 best targets, each rupee spent would deliver ₹21 of social benefits. To zero in on the best targets, countries can do a cost-benefit analysis which tries to identify all costs, including economic, social and environmental.

A comprehensive analysis makes it possible to weigh all benefits against all costs and suggest the benefit per rupee or dollar of cost. It allows us to rank all policies, from very-effective policies that deliver perhaps ₹15 or more in total benefits for every rupee spent, to moderately effective policies delivering ₹1-5 of benefits per rupee spent, all the way to bad policies that deliver less than one rupee for each rupee spent.

For the past half-decade, because of India’s rapid growth, there has been more than ₹2 trillion of new money available every year to spend on increasing Indian welfare. If just 5% of this additional public consumption would be channelled towards some policies which create large social benefit, then there will be a tremendous improvement in the health and educational outcomes for our citizens. In rupee terms, each rupee could generate about ₹50 of social, economic and environmental benefits.

A new working paper (bit.ly/3EeskIe) by the Economic Advisory Council to the Prime Minister (EAC-PM) titled ‘Delivering on the Sustainable Development Goals 2016-2030’ delves into 12 different policy interventions which will have a very high social, economic and environmental return on investment. We discuss some of these here:

1) Nutritional and health counselling: This cost-effective intervention aims to enhance the knowledge and capacities of mothers and communities on basic health, nutrition, childcare and development. Studies (bit.ly/3EF1M4a) have found that nutrition counselling reduces stunting by 12%. This means the child will develop better, learn more in school and in adult life will become more productive, leading to higher wages. Each rupee spent here could deliver ₹43-61 of long-term social benefits for India.

2) Family planning: Investment in this has a very high benefit-to-cost ratio. It delivers several important benefits. It clearly reduces infant and maternal mortality. It also drives economic growth, because lower fertility means more attention and capital available to each child. A reduction in total fertility of 0.5 leads to a 5.6% increase in GDP per capita over 20 years and a rise of 11.9% in GDP per capita over 50 years. A study in Rajasthan shows that a rupee spent could generate ₹99 in social and economic benefits.

3) The routine immunization programme: This also requires more investment. While vaccines for tuberculosis, diphtheria, tetanus, pertussis, measles and polio are readily available, some choose not to get their children vaccinated for various reasons. A randomized control trial found that rolling out immunization camps and incentivizing women with lentils and hot meals would lead to almost 68,000 more fully vaccinated children per year. Each rupee spent could deliver beyond ₹30 in social benefits.

4) Agricultural R&D and certified seed production: This needs investment too. A cost-benefit analysis estimates that annual marginal spending of around ₹39,000 crore per year on agricultural R&D in India can cause a permanent improvement in yield of 0.4% for crops and 0.2% for livestock products. This would benefit farmers (producing more) and consumers (paying less).

As the world is facing too many demands and has too few resources, it would be prudent to focus on the most effective policies first. This makes eminent sense for a rapidly-growing developing country like India, where smart policies can deliver enormous benefits. But India can also help set this agenda across the world, as it takes the G20 helm for the next year. As the world is faltering on its SDG promises, India can show how to do much more with every rupee.

Bibek Debroy, Bjorn Lomborg & Aditya Sinha are, respectively, chairman, Economic Advisory Council to the Prime Minister (EAC-PM), president, Copenhagen Consensus, and additional private secretary (research), EAC-PM