Rahul Gandhi in conversation with Nobel Prize winner Abhijit Banerjee on COVID 19 & its economic impact, Episode - 2

 06 May 2020 ( News Bureau )

Dr. Banerjee: I think it is two different things. In a way, I think that the real problem that immediately arises is that the good policies that the UPA had framed are inadequate at the moment. The government has adopted them in a way. It is not that there was any discriminatory disagreement on this. It is quite clear that UPA policies would work for whatever could have happened.

The difficult task is to do for those who are not part of these policies or schemes. And there are many such people. Especially migrant laborers. The scheme which was brought in the last year of UPA rule that Aadhaar should be implemented nationwide and used for PDS and other schemes. You will get the benefits of Aadhaar, wherever you are. There is a great need to implement this scheme at this time. If we look back, it could have saved many people from trouble. If this happens, people would go to the local ration shop and show their Aadhaar that I am the beneficiary of PDS. For example, even though I am from Malda or Darbhanga or anywhere, I can take advantage of it in Mumbai. Even if my family lives in Malda or Darbhanga. But here is my claim. And if it did not, then it means that there is no system for many people. They are also not eligible for MNREGA because there is no MNREGA in Mumbai, and could not even be a part of PDS as they are not local residents.

Actually the problem is that while designing the welfare schemes, the thinking was that if someone is not at his place of origin then it is assumed that he is working and he is earning. And that's why this system collapsed.

After this, the question is about poverty. I do not know that even if the economy improves, it will have a lasting effect on poverty. The big worry is whether the economy will recover? And especially in the way this disease is taking time and the procedures that are being adopted. I believe that we should be optimistic that the economic situation of the country will improve, it is just that right decisions are taken.

Rahul Gandhi: But most of it works in small and medium industries and businesses. These industries and businesses face cash problems. Many of these businesses may go bankrupt in this crisis. In such a situation, the economic loss of these businesses is directly related to them because many of these businesses give jobs and jobs to these people.

Dr. Banerjee: That is why people like us say that incentive packages should be given. This is what America is doing, this is what Japan and Europe are doing. We have not decided anything yet. We are still only talking about 1% of GDP. The US has given a package equivalent to 10% of GDP. I think we can do it easily for the MSME sector, and it would be right that we can stop debt collection for some time. We can do more than this. We can also say that the repayment of debt for this quarter has been canceled and the government will pay it. So you can do more than this. Instead of just repaying the loan back and forth, it would be right to forgive it. But beyond this, it is not clear whether it is right to target only MSMEs. The need is to increase demand. People should have money in their hands so that they can shop, go to stores, buy consumer goods. MSMEs have many products that people buy, but they are not buying. If they have money and you promise to give money then it is possible. Money is not there. If you are in the red zone, or wherever the lockdown is being removed, then you can spend if you have 10,000 rupees in your account. Spending is the easiest way to revive the economy. Because this will bring money in the hands of MSMEs, they will also spend, and thus a chain will be formed.

Rahul Gandhi: That is, we are talking about NYAY scheme in a way i.e. direct cash transfer which reaches people directly.

 

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