Put some money in the hands of people…so that they have money when lockdown opens, says Abhijit Banerjee

The Congress on Tuesday released an edited video of a conversation between Nobel laureate Professor Abhijit Banerjee and former party chief Rahul Gandhi on the challenges posed by the COVID-19 pandemic. Here are the excerpts from the conversation.

Rahul Gandhi: Just out of curiosity, you got the Nobel prize. Did you expect it or was it completely out of the blue

Abhijit Banerjee: It was completely out of the blue. I had no premonition about it.

RG: Wanted to talk about the corona challenge, the impact of the lockdown. We had a lot of programmes like NREGA to lift people out of poverty. Now, it is gone, completely gone off…

AB: Yes, many of the policies and instruments of the UPA would have been very good. Don’t think there have been any major political challenge to them. Right now, linking Aadhar with Public Distribution System would have been very good. You can claim PDS in Mumbai while you can be from Malda or Darbhanga.

Also read: Spend ₹65,000 crore for the poor: Raghuram Rajan

RG: Many of these people earn their living in small and medium enterprises…

AB: Well, some of the decisions like debt moratorium is good, but right now the idea is to increase the demand.

RG: So we are talking about a Nyay version. Direct transfer of money to the poorest people.

AB: I am not sure if I would go for targeting of the poorest people. In this mess, it is difficult to identify. We had a demand problem and now we will have a bigger demand problem.

RG: You are talking about pump priming

AB: I have been saying this for a while….put some money in the hands of people..so that they have money when the lockdown opens. Apart from that we have talked about temporary ration card…give them food for three months and then again decide..

RG: But the money will be of no use if the lockdown continues. So, it should be open sooner?

AB: Well yes, but we also don’t want the lockdown to be opened up when the disease is increasing.

RG: We have talked of migrants, food…any other suggestion you want to make…

AB: I think making cash reach to people who may not have Jan Dhan accounts.

RG: What do you think about centralisation and decentralisation?

AB: There are some issues like moving the migrants that should have been centralised. Right now, it seems to me that a lot of it is being done bilaterally.

RG: Are there any examples from any other country?

AB: In Indonesia, they are making community decision on who should get the cash or benefit…

RG: In India, we may run into a dominant caste problem..

AB: We looked at that in Indonesia where an elite may corner the benefits, but we didn’t find much evidence of it.

RG: When this disease is washed away six months from now, what do you think would be the impact?

AB: What we had discussed sometime before, the demand problem. I think the main two issues would be to avoid the chain of bankruptcy…May be write off some loans… The other is the demand shortfall.. In U.S., Republicans, who are a bunch of financiers, are aggressively doing it. Putting money in people’s hands.

RG: What do you think of this idea that only strong leaders being capable of taking on the Corona challenge?

AB: That would have been disastrous. U.S. and Brazil are best examples to disprove that right now.

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