Big Stimulus like giving cash to 60% of people is needed for Indian Economy to revive: Noble Laureate Abhijit Banerjee

Indian Economy
Indian Economy

Noble Laureate Abhijit Banerjee expressed his view that India should provide big stimulus by providing cash in hand to make the demand back in track. He expressed that this will prevent chains of bankruptcies as the Indian economy hit hard by the lockdown situation due to novel coronavirus.

He told that the stimulus package is needed and India has not declared any large financial package. He viewed that increasing govt. spending is an easy way to revive the economy. He suggested that govt. should issue temporary ration cards for the three to six months and these ration cards should be available to everyone. He viewed that these ration cards will be used for wheat, rice and even for transferring money. Banerjee is recognized for the ability to divide the problem of tacking global poverty in smaller subject i.e. for the experimental approach to alleviate poverty globally. According to him, there will be nothing bad happen if the bottom 60% per cent is given direct cash. Hence, he also thinks that giving money to the lower middle class is necessary. According to him direct cash transfer only to the poorer people was debatable.

The former Reserve Bank of India (RBI) governor Raghuram Rajan also suggested while talking Gandhi that government should transfer cash directly to the poor people and the public distribution system (PDS) should be used to supply food. According to him this is needed to fight the crisis of lockdown and estimated that the effort will cost Rs. 65,000 crore. Banerjee supported the Aadhar-based system as the system would save a lot of misery for poor people and many people are not in the system. He gave the example of the US as the US pumped a lot of money into the hands of people to make the demand back into the track. He also viewed that to put a moratorium on debt payments will be a wise decision. He also called for caution on lifting the lockdown. He said govt. should not stop the lockdown all of a sudden as there is a chance of spreading novel coronavirus surge. The daily data also shows that COVID-19 cases in India are in rising and the daily number is increasing each day. He also suggested that India should be optimistic about the revival of economy post-lockdown. The centralisation versus decentralization issue is debated in many states. Banerjee remarked that the problem of movement of the migrant workers could be handled by the state government only and these migrant people should have been tested by the central government. At last, he suggested that to make own scheme and reaching to a wider section of citizens, the state government should be given money. At last, he viewed that the strongman theory causes disaster only. He gave the example of Brazil and the US on that issue. The central govt. already to some economic boosting measure. Let’s see when the next boosting measure will come. 


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