Giving people money directly to revive the economy: Abhijeet Banerjee to Rahul

NEW DELHI: leader of Congress Rahul Gandhi In his series of interactions with economic leaders, he has now spoken to the Nobel laureate, who has suggested that people should receive money directly if the government wants to revive the economy Quick. There must be an Aadhaar-based PDS or temporary ration card so that those who are stuck anywhere can get rations for their needs.

Speaking about migrants in particular, Banerjee said: One of the ideas that was debated in the last years of the current Government, but which he also embraced, was the idea that Aadhaar would nationalize and, therefore, be used for the System Public Distribution and other things. Aadhaar-based claims on PDS would make you eligible wherever they are. That would have been wonderful to have right now.

He even said that temporary ration cards should be given to everyone for the next six months, which would save a lot of misery. Because then a lot of people could go to the local ration store, the Nobel laureate said.

Banerjee pointed out what made things collapse. It is the idea that anyone who is not really where they are supposed to be is actually working. And, therefore, you are earning an income. And you don't have to worry about them. And that is 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.

More about Covid-19 >

It's more about reviving demand. Give money to everyone, so they can buy in stores or buy consumer goods. So MSME produces a lot of things that people will want. They haven't been buying it. If they had money or even promise you money, it doesn't have to be that the money is there now, Banerjee said.

Citing an example, he said that if any body 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."

The conversation with Banerjee is the second in the series after Gandhi spoke to the former RBI governor.