Time to return home. Deperate times.

Transfer money to people to revive economy; Aadhaar based PDS for poor

Nobel Laureate on tackling the crisis; strong leaders in US, Brazil messed up

Agency Report | New Delhi | 5 May, 2020 | 11:00 PM

Congress leader Rahul Gandhi in his series of interaction with economic leaders has now spoken to Nobel laureate Abhijit Banerjee who has suggested that people should be given money directly if the government wish to revive the economy fast. There should be Aadhaar-based PDS or a temporary ration card so that those who are stuck anywhere could get ration for their needs.

Speaking about the migrants, in particular, Banerjee said: “One of the ideas that were mooted in the last years of the UPA but also embraced by the current government was the idea that the Aadhaar would be made national and therefore would be used for Public Distribution System and other things. Aadhaar-based claims on PDS would make one eligible wherever they are. That would have been wonderful to have right now.”

He even said that temporary ration cards should be given to everybody for the next six months that would kind of save a lot of misery. Because then a lot of people would be able to go to the local ration shop, the Nobel laureate said.

Banerjee pointed out what has made things to collapse. “It is the idea that anybody who is really not where they are supposed to be is actually working. And therefore is earning an income. And you don’t have to worry about them. And that’s what has collapsed.”

“Real concerns are — will the economy revive, and in particular, how does one think through the possible time paths of this disease through that process,” he said, suggesting targeting the MSME sector would be the right channel.

“It is more about reviving demand. Giving money in the hands of everybody, so that they can buy from stores or they buy consumer goods. So MSME produces a bunch of stuff that people will want. They’ve not been buying it. If they had money or even if you promise them money, it doesn’t have to be that the money is there right now,” said Banerjee.

Citing an example, he said that if anybody is in the red zone and is assured that whenever lockdown is lifted will have money in their account, say Rs 10,000 in the account and they can spend it. “I think spending is the easiest way to revive the economy. Because then the MSME people get money, they spend it and then it has the usual Keynesian chain reaction.”

Conversation with Banerjee is the second in the series after Gandhi spoke to former RBI Governor Raghuram Rajan.

Taking a cue from the interaction between Rahul Gandhi and noted economist Abhijit Banerjee, the Congress attacked Prime Minister Narendra Modi for a “one-man show ” during the pandemic and not heeding the advice of the opposition and experts.

“We look for help of the federal government, a one-man show is absolutely not a model that can be followed,” said party spokesperson Sushmita Dev.

The Congress party tore into the ruling dispensation and said more food has to be made available, there has to be more money that has to be made available to the common man, there has to be a stimulus package like America is giving, we have to shed the syndrome of “I am the strongest” and I can do this alone and take everybody on board.

“One man cannot charge into the virus, ” she said while targeting the government for not taking the chief ministers’ advice, who have to work on the ground.

Congress has maintained that the government must prioritise a few things and that is the only way forward to defeat the virus.

The first and the most crucial problem is that of food and wherever you are you should have access to food, whether you are inside the PDS system or outside the PDS system and that is something that has been consistently raised by Congress interim president Sonia Gandhi and the party.

The party suggested “One way of doing it is the direct transfer scheme something called NYAY which the UPA had proposed in its manifesto. Unless you create liquidity in the hands of the people it is not possible to fix the demand side.”

In a direct barb aimed at Prime Minister Narendra Modi, Rahul Gandhi also raised the issue of non-decentralisation of power amid the Covid-19 crisis to Nobel laureate Abhijit Banerjee, who said there is a misconception that strong leaders can fight the virus better, as the US and Brazil have evidently messed it up.

“That has been disastrous. The US and Brazil are two countries that are messing up right and left. These are two strongmen behaving like.. pretending like… they understand anything.. but even what they say every day is kind of laughable.

“If anyone wanted to believe in the strongman theory, this is the time to dissuade themselves,” Banerjee told Gandhi during a conversation on the economic fallout of the COVID-19 crisis as part of a series of discussion with experts.

The professor was replying to a query “What is being sold is that it requires one man to charge in against the virus” underlying undercurrent is that strong leaders can take on this virus.

This question is considered a direct barb against Prime Minister Narendra Modi whom the Congress has accused of ignoring the suggestions made by the opposition.

The supporters of the Prime Minister consider him a strong leader who takes tough decisions, including the announcement of the lockdown.

The Congress is alleging that the Prime Minister himself takes decisions and there is no decentralisation of powers and states are not taken into confidence.

When asked by Rahul on the decentralisation, Banerjee replied, “This is a tension and clearly the migrant movement question cannot be handled by a state government. It is a bit odd that it is being handled so much bilaterally. In a sense, I feel like that is a problem.”

He said that the issue of migrants should be dealt with by the Union Government.

“This is a place where you don’t want to decentralise because you want to actually aggregate the information. If this is a population of people who were very infected, you don’t want them to be moving through the whole country.

“I feel this is a place where we should have tested people where they are allowed to board a train or something. That is a central question and something that only a federal government can do. Tell the government of Uttar Pradesh that you cannot just bring your migrants home.” (IANS)