While the government reportedly prepares a second economic relief package to mitigate the fallout of coronavirus, handing out direct cash to people amid the ongoing lockdown is not a desired solution, as it might create further problems rather than solving them, Nobel laureate Abhijit Banerjee said in an interview with Congress leader Rahul Gandhi today. “I don’t think it is wise to give people money when the entire economy is shut. It will cause inflation,” Abhijit Banerjee said, adding that there will be a supply demand gap. Instead, he suggested that the government must assure people that they will get money after two months, which can be spent when the lockdown lifts. He also suggested that the lockdown needs to be lifted soon but not at the cost of aggravating the coronavirus situation.
However, reiterating that money will play a decisive role in the survival of the economy, he said that India must learn from the US which is handing out money to people. He said that the same will kickstart the economy and the government must pump some money. “We should take a cue from the US by pumping in more money in the hands of people to revive demand,” Abhijit Banerjee told Rahul Rahul. The Congress leader has been doing a round of interviews with prominent people including former RBI Governor Raghuram Rajan.
On the issue pertaining to food for all, Abhjit Banerjee said that the government must start with handing out temporary ration cards to anyone who wants one as there might be people who will not benefit from the PDS because they don’t have a ration card. For three months, the government must issue temporary ration cards so that no one who actually needs food, is without a ration card. India has enough food stocks to cater to its poor people. The rabi crop was also good this year which means that there will be enough wheat, Abhijit Banerjee said.
Source:- financialexpress.com