New Delhi: India ought to come out with a big sufficient stimulus package deal to revive demand, Nobel laureate Abhijit Banerjee stated on Tuesday, asserting that placing money within the fingers of individuals could be one of the simplest ways to spice up the financial system put up lockdown.
Banerjee, whereas speaking to Congress chief Rahul Gandhi via video-conferencing, advised giving cash into the fingers of the underside 60 per cent inhabitants to assist revive demand.
He was deliberating on the financial affect of the COVID-19 pandemic with Gandhi as a part of a sequence of dialogues broadcast on Congress’ social media handles.
Banerjee stated it was necessary for India to announce a big sufficient stimulus package deal to cope with the disaster on the traces of what the US, Japan and 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 famous economist stated.
“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 stated.
To Gandhi’s query as as to whether some type of the Congress-proposed NYAY scheme or direct money switch to individuals was the necessity of the hour, Benerjee answered within the affirmative saying it shouldn’t be restricted simply to the poorest.
“I would say the 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 stated.
Banerjee additionally advised that the federal government ought to hand out non permanent ration playing cards to individuals to cope with the issue of meals distribution.
He stated one other concern wanting forward post-COVID-19 and is a sequence of bankruptcies. Perhaps writing off lots of debt is the way in which to go,” he advised. The opposite concern, the famous economist stated, is the demand shortfall.
“Getting some cash into the hands of the population is the best way to kick start the economy,” he stated.