Guidance or policy is a framework which the government makes in order to achieve a particular set of goals. It lays down the plan, steps, resources and contingencies for the process achieving the goals. It is aimed to provide direction to the process and there is no mandate to follow the same policy in any case which means policy can easily be changed as per requirement.
On the other hand, legislation is a set of rules approved by the judiciary to enable a particular process. It is mandatory to follow a legislation whenever the said process is being executed and the legislation can only be changed if it is challenged in the court of law.
The Water Policy by the US governement is an example of guidance where the government provided a framework for the utilization and preservation of water bodies. This was later later adopted as a legislation when the top court mandated the government to strictly penalize the polluters.
Guidance provides government the flexibility to modify as per changing conditions and environments but extra flexibility can sometimes be misused by the government officials. Legislation, however, is rigid and so is followed by discipline by all stakeholders. But, a common legislation is difficult to follow in some cases as customization may be required from case to case.
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