Question

‘The Government and policy makers use statistical data to formulate suitable policies of economic development’. Illustrate with two examples.

Answer 1

The statistical data is of prime importance for the government and the policy makers. The statistical data not only help them to analyse and evaluate the outcomes of the past policies but also assist them to take corrective measures and to formulate new policies accordingly. Further, the statistical data also help the government to ascertain various needs and priorities for the pursuit of the common goal of economic development. For example, if the Indian Government aims at encouraging the production level, then it formulates its economic policy based on the average production level of the past three years. Another example could be the preparation of the government budget. The previous data on government expenditures and government revenues are taken into consideration for estimating the allocation of funds among various projects.