India should put in large enough stimulus package to revive demand: Abhijit Banerjee

NEW DELHI: Nobel laureate Abhijit Banerjee on Tuesday urged the Centre to provide a larger stimulus package to help India tide over the economic fallout of the Covid-19 crisis.

The economist also pitched for direct cash transfer to 60% of the population, issuing temporary ration cards and using ‘national’ Aadhaar cards to help the poor. While welcoming moratorium on debt payment, Banerjee suggested that government could cancel it for this quarter.

“A lot of us have been saying that we (India) need a stimulus package. That’s what the US is doing, Japan is doing and Europe is doing. We really haven’t decided on a large enough stimulus package. We are still talking about 1% of GDP. United States has gone for 10% of GDP,” said Banerjee in a nearly 30-minute virtual interview with Congress leader Rahul Gandhi.


In AICC’s transcript of the ‘Conversation between Rahul Gandhi and Abhijit Banerjee’, the Congress leader asked 24 questions, of which, 19 were in a format of 1-3 sentences, and Banerjee answered by giving his detailed perspective.

On debt payment, Banerjee said, “We have done one thing that I think is wise, which is to kind of put a moratorium on debt payment....We could even say that the debt payment for this quarter will be cancelled... It’s not just a matter of rescheduling it, just permanently cancel it.”

He felt enhancing the purchasing power of people could actually help MSMEs more. “It is more about reviving demand.”

On helping the poor, including migrant workers, Banerjee, who had helped the Congress conceive the ‘Nyay’ scheme, said: “I would say bottom 60% of the population, we give them some money… If they spend it, it would have a stimulus effect.”

While some Congress leaders think such interviews will project Gandhi as a person capable of conducting “serious conversations with intellectuals”, some others feel given his stature “as future PM face”, he should have been the one outlining his vision by being interviewed by his guests.