‘Certainly not an eye-wash’: Nobel-winning economist Abhijit Banerjee on Centre's Rs 20 lakh crore

The Nobel laureate has voiced hope that the Centre's economic relief package will boost the supply side which will drive economic recovery.

Nobel laureate Abhijit Banerjee believes that Centre’s special economic package worth Rs 20 lakh crore under the Atmanirbhar Abhiyan is “certainly not an eye-wash”.

Banerjee has also voiced hope that it will boost the supply side which will in turn drive economic recovery.

During his address to the nation earlier this month, Prime Minister Narendra Modi had announced the stimulus package aimed at empowering sections of society impacted by the novel coronavirus pandemic.

Following this announcement, Union Finance Minister Nirmala Sitharaman put out the contours of the package over a series of press conferences.

Speaking exclusively to News18.com, Banerjee said: “It (economic package) is certainly not an eye-wash. It is an ambitious plan to redefine a lot of the economic rules of the game that we have operating under, and hoping that this will give a boost to the supply side which will drive economic recovery.”

“It will take some work to understand what the proposed changes exactly will be, so I will reserve my judgment on those, but I tend to believe that these supply side changes will be slow to have an impact on the earnings of the average person and therefore, the government needs to worry more about whether this will address the massive demand shortfall,” he added.

Earlier, Banerjee and his wife Esther Duflo, both of whom were awarded the 2019 Nobel Prize in Economics, had suggested that India should immediately begin cash transfers of Rs 1,000 per person every month as universal basic income (UBI) to bypass the economic crisis caused by the pandemic.

The duo also said that India should implement the ‘one-nation, one ration card’ scheme urgently.

“I still think the economy and the poor will benefit from a large-scale intervention that gives every household some cash. These people have no money and no purchasing power. They should get some cash in hands from the government to secure their roti, kapda and makan,” Banerjee told News18.