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Coronavirus crisis: Govt should write off loans of small businesses, says Abhijit Banerjee

Banerjee advocates for handing out ration cards to everybody to fulfill food demand and create more space for upcoming wheat and rice crop storage in the government facilities

twitter-logoBusinessToday.In | May 5, 2020 | Updated 11:31 IST
Coronavirus crisis: Govt should write off loans of small businesses, says Abhijit Banerjee
Congress leader Rahul Gandhi and Nobel Laureate Abhijit Banerjee

Nobel Laureate Abhijit Banerjee during his conversation with Congress leader Rahul Gandhi on the economic fallout of novel coronavirus on Tuesday said the government needed to extend economic help to businesses that had been affected due to the pandemic. Rahul said the COVID-19 pandemic had thrown a big challenge in front of governments and that several people could lose jobs. While agreeing to Rahul Gandhi's remarks, Banerjee said there's a need for a big economic package in India.

Banerjee advocated for handing out ration cards to everybody to fulfill the food demand and also create more space for upcoming wheat and rice crop storage in the government facilities. On Rahul's remarks that it's really important to come out of the lockdown as soon as possible and have a post-COVID plan, Banerjee said: "We should know about the pandemic's nature and that extension of the lockdown would not help."

On the issue of food shortage, Banerjee said he had given suggestions to the government earlier too saying it should give ration cards to everybody. These ration cards should work for at least three months and everybody should get them for free. "Everyone needs rice, pulses, wheat and sugar right now," he opined.

Also read: Coronavirus: Indians stranded in UAE to be evacuated on May 7; 2 lakh people register

Banerjee said the government needed to create a proper environment if it wanted to handout money to more people. "Those who have Jan Dhan account can get it but the government needs to think about those without such accounts," he said, adding states could help in such cases by giving money to the common people.

On Rahul's remarks that the Centre should take big decisions and smaller and more concrete decisions should be left to states, Banerjee said while the Centre needed to bring new schemes for the welfare of poor people, it's states' responsibility to give direct benefit to the poor. Banerjee cited Indonesia's example saying the country had started a scheme where it's left for people to decide who needs money in times of coronavirus.

On Rahul Gandhi's remarks about what should the government plan be for post-coronavirus scenario, Banerjee said it was very important that the government wrote off loans to give people the power to sustain. Rahul also asked Banerjee about his experience in winning the Nobel Prize in economics last year, to which he said he never thought about it.

Banerjee also appreciated some policies taken by the previous Congress government, adding that schemes like Aadhaar had also got the current government's support.

Rahul Gandhi also discussed the coronavirus pandemic and its economic implications with former Reserve Bank of India governor Raghuram Rajan last week. Rajan had said India should be "cleverer" in lifting the lockdown and should open up its economy in a "measured way" to save jobs.

Also read: Coronavirus lockdown 3.0: India sees biggest jump with 3,900 new cases, 195 deaths in 24 hours

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