Nobel laureate Abhijit said the government should provide cash to 60% of India’s poor population


Nobel laureate Abhijit Banerjee said that the present Modi government should provide to cash 60 per cent of India’s poor population post-lockdown to help revive the economy.

In a conversation with the former Congress president Rahul Gandhi, Mr. Abhijit Banerjee said that increasing the spending power of common people may be a better option to revive the economy, than providing relief packages to micro, small and medium enterprises (MSMEs) sector.

“It is not clear that targeting the MSME sector is the right channel. It is more about reviving demand. Giving money in the hands of everybody, so that they can buy in stores or they buy consumer goods,” he said during the video chat.

“If you are in the red zone, you can say look whenever the lockdown is lifted, you will have money in your account, Rs 10,000 in your account and you can spend it. I think spending is the easiest way to revive the economy,” he added (Abhijit).

Abhijit Banerjee

He also said “I think targeting the weaker is extremely costly. You try to target in this mess, who has become poor after their shop was shut for 6 weeks. I don’t know how you’d figure this out”.

According to the Ford Foundation International Professor of Economics at Massachusetts Institute of Technology in the US, Abhijit Banerjee targeting the poorest for the revival of the economy will be an expensive exercise while transferring funds to the bottom 60 per cent of the population will speed the process and will create a stimulus effect.

Abhijit Banerjee pointed out that India faced a demand problem even before the Covid-19 pandemic and it is only going to worsen now.

Abhijit Banerjee also suggested to distribute temporary ration cards to the needy ones and argued that government godowns have enough stocks of wheat and rice for distribution.

He also pointed out that many people do not have the access to the government schemes like Jan Dhan accounts, he advised: “we should give a bunch of money available to the state governments to try out their own schemes, to be creative in reaching people who are excluded using NGOs.”


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Jyotika Kumari
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