economic survey: How Barbell Strategy, mentioned in last year’s Economic Survey, was put to work

Under this strategy, a combination of safety nets for vulnerable sections and real-time information-based policy adjustment was brought into play to tackle the challenges posed by the pandemic, the survey said.

It detailed how the government dumped India’s conventional policy approach known as the Waterfall method in favour of the Barbell strategy as Covid spread its tentacles in the country.

The Waterfall approach — a policy mainstay during the Five-year plan era — involves a “detailed, initial assessment” and then making a rigid, upfront plan to tackle a problem. In contrast, under the Barbell method, policy outcomes are assessed rapidly based on real-time information and adjusted incrementally.

In essence, the Barbell strategy, in contrast to the Waterfall one, takes into account a worse possibility initially, and then calibrates the response step by step through a feedback loop.

The Barbell strategy is essentially the same as the widely-used framework known as the Agile Approach. This approach is common in domains like technology development and project management.

The Waterfall method works on the principle that all aspects of a certain problem can be understood at the very beginning — which is why the survey said it was unfit to meet the very unusual, unforeseen exigencies triggered by the pandemic.

The efficient use of the Barbell strategy was also made possible by the easy availability of data now compared to the past, it said.

These data include GST collections, power consumption, mobility indicators, digital payments, satellite photographs, cargo movements, highway toll collections, etc. The availability of these data points aided the government to tailor its responses to the evolving situation “rather than rely on pre-defined responses of a Waterfall framework”, said the survey.

Agencies

The Barbell approach helped made it possible to target the vulnerable sections/businesses in a better way, keeping the pandemic’s economic toll at much less than what could have been, it added.

Under this approach, in the past two years, the government was able to utilise a range of High Frequency Indicators (HFIs) — collected by both government and private agencies — that made it possible to monitor the situation constantly and make real-time adjustments in policy, the survey stated.

On monetary policy, while the survey said that while the measures were calibrated to provide a cushion to and support growth, these were also carefully controlled in order to avoid the fallouts of excess liquidity.