What Abhijit Banerjee spoke about Large Scale Stimulus Package of India
Reportedly Nobel laureate abhijit banerjee said on tuesday suggested that the government must give money into the hands of the bottom 60 per cent population to help revive demand, and asserted that india should come out with a large enough stimulus package to revive demand. Banerjee was talking to india NATIONAL CONGRESS' target='_blank' title='congress-Latest Updates, Photos, Videos are a click away, CLICK NOW'>congress leader rahul gandhi through video-conferencing as part of a series of dialogues broadcast on the economic impact of COVID-19 on Congress' social media handles.
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. The noted economist said "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".
He 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". 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, Banerjee answered in the affirmative saying it should not be limited just to the poorest.He said "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". Banerjee also suggested that the government should hand out temporary ration cards to people to deal with the problem of food distribution.