New Delhi:
India should come out with a large enough stimulus package to revive demand, Nobel laureate Abhijit Banerjee said on Tuesday, asserting that putting cash in the hands of people would be the best way to boost the economy post lockdown.
Banerjee, while talking to Congress leader Rahul Gandhi through video-conferencing, suggested giving money into the hands of the bottom 60 per cent population to help revive demand.
He was deliberating on the economic impact of the COVID-19 pandemic with Gandhi as part of a series of dialogues broadcast 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.
"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 noted economist 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," he said.
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, Benerjee answered in the affirmative saying it should not be limited just to the poorest.
"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," he said.
Banerjee also suggested that the government should hand out temporary ration cards to people to deal with the problem of food distribution.
He said another concern looking ahead post-COVID-19 and is a chain of bankruptcies.
"Maybe writing off a lot of debt is the way to go," he suggested.
The other concern, the noted economist said, is the demand shortfall.
"Getting some cash into the hands of the population is the best way to kick start the economy," he said.
SC refuses to entertain Jairam Ramesh's plea on universal food security during COVID-19
The Supreme Court Tuesday refused to entertain senior Congress leader Jairam Ramesh's plea seeking directions to the Centre and states to ensure universal coverage of food security during the Covid-19 pandemic and asked him to make a representation to the Union government.
Senior advocate Salman Khurshid, appearing for Ramesh, said the issue raised in the petition relates to food security and the petitioner himself was instrumental in the framing of the National Food Security Act of 2013.
Khursid said several people have moved back from their places of work to their native places and as they have ration cards of local area which were not being accepted by the authorities in the area to which they have returned.
A bench of Justices Ashok Bhushan, Sanjay Kishan Kaul and B R Gavai, which took up the matter through video conferencing, said the court has found that grievances raised in the petition have not been brought to the notice of the government, therefore it is allowing the petition to be withdrawn.
Khurshid said the government has announced for doubling of rations to the food card holders but what would happen to those who either don't have it at all or don't have it with them at the time of need.
He said the government's one ration card scheme is yet to take shape and till then apex court verdict in Swaraj Abhiyan case, wherein it was stated that ration cards will not be necessary during disasters like draught, should be implemented.
To this, the bench said somebody not in his local place of work may have difficulty but for those who have returned to their native places, the state government can take care of them.