Abhijeet Banerjee gives in real solution to revive Indian economy; Suggests to target MSME sectors

NewsBharati    05-May-2020 13:15:56 PM
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“Spending is the easiest way to revive the economy. A direct transfer to people to spend is a good way to ensure this”, said Nobel laureate Abhijeet Banerjee in conversation with Rahul Gandhi today. This is after the Rahul Gandhi last week had a deep discourse over reviving economy with former Governor of RBI, Raghuram Rajan.
 
Being responsible ever could have anyone seen, Congress's Rahul Gandhi has yet again proved that he thinks of India's develpment from every possible angle. Gandhi discussed the impact of COVID and the lockdown and the economic devastation on India's poor people. "We’ve had in India for some time, a policy framework, particularly when we were in the UPA, of providing sort of a floor for poor people. For example; MGNREGA, Right to Food etc. and now a lot of that work is going to fall by the wayside because this disease has come in, and millions and millions of people are going to fall back into poverty", he said.

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Giving it a credible thought, Banerjee said that the real problem in the very short run was that these good policies put in place by the UPA were currently inadequate. "The part of the problem in the very short run is that the conceptualisation of the welfare structure was based on the idea that anybody who is really not in where they are supposed to be is actually working and therefore is earning an income and you don’t have to worry about them. And that’s what has collapsed", he added.
 
Banerjee said it was important for India to announce a large enough stimulus package to deal with the crisis on the lines of what the US, Japan and the Europe are doing. "We really haven't decided on a large enough stimulus package. We are still talking about 1% of GDP. The United States has gone for 10% of GDP," the noted economist said. "We have done one thing that I think is wise, which is to kind of put a moratorium on debt payments. We could do more than that. We could even say that the debt payments for this quarter will be cancelled and will be taken care of by the government," he added.
To Gandhi's question as to whether some form of the Congress-proposed NYAY scheme or direct cash transfer to people was the need of the hour, Benerjee answered in the affirmative saying it should not be limited just to the poorest. "I would say bottom 60% of the population, we give them some money, nothing bad will happen in my view. If we gave them money, well some of them might not need it. Fine they'll spend it. If they spend it, it would have a stimulus effect," he said.
 
Banerjee also suggested that the government should hand out temporary ration cards to people to deal with the problem of food distribution. He said another concern looking ahead post-COVID-19 and is a chain of bankruptcies. "Maybe writing off a lot of debt is the way to go," he suggested. The other concern, the noted economist said, is the demand shortfall. "Getting some cash into the hands of the population is the best way to kick start the economy," he said.
 
The problem with the current government is that it wants to run a vast nation from the central location, being Delhi. It seems does not believe in the federal structure of India. While the current ruling party is budy spreading hatred and violence, the Indian National Congress is leaving no stones unturned to highlight measures that could help India revive its economy amid COVID-19.
 
This being the second most relevant comprehensive discussion on current situation of our county, both intellectual speakers were seen touching upon core challenges and opportunities in the wake of coronavirus. As a responsible opposition leader, RahulGandhi’s efforts are a way to offer constructive advice, new insights and suggestions that are good for the people. These dialogues surely enrich our democracy and make it more interactive and open.