Politics: Tête-à-Tête with Rahul Gandhi; Nobel Laureate Prof. Abhijit Banerjee says India needs a bigger stimulus package.

Nobel Laureate Abhijit Banerjee is the latest to interact in a series of video conversations by Rahul Gandhi with experts on health and economy. Banerjee stated that to fight the economy, the government must plan a bigger stimulus package and take a leaf out of the USA. India should really inject more money in people's hand so as to reinvigorate demand in the market. He explained how India should decide on a larger stimulus package like the USA, which has declared a package of 10% of its GDP. Banerjee says, "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". 

On talking about the economical steps taken by the government, 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". 

The noted economist also urged the government to aim beyond 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 explained.

Professor Banerjee has also raised two major concerns after the end of this pandemic, first is how to steer clear of the chain of bankruptcy, and writing off a lot of debts may be the answer to it. On the second concern, he says, "The second is demand in shortfall and getting some cash into the hands of people in the best way to kick start the economy."

Rahul Gandhi has started conversations with noted experts and last week had an interaction with former Reserve Bank Of India Governor Raghuram Rajan discussing the impact of COVID 19 pandemic & lockdown on the economy.