Former RBI Governor Raghuram Rajan in an online conversation with former Congress president Rahul Gandhi, whose video was released by the party on Thursday, said India needs to open its economy in a “measured and clever way and cannot wait until it has zero coronavirus ( COVID-19 ) cases”.
The renowned economist, who is right now teaching in the University of Chicago, said India could shape the global dialogue in a post-Covid world but also cautioned not to have “a divided house” in challenging times.
Mr. Rajan, who took part in the first of a series of dialogues planned by the Congress on the challenge posed by the pandemic, estimated that India needs to spend about ₹65,000 crore to take care of the vulnerable sections like the migrant workers .
“Our GDP is ₹200 lakh crores, and out of that ₹65,000 crore is not a huge amount. So, we can do it. If this is for the poor and to save their lives and livelihood, we must do it,” Mr. Rajan said.
Mr. Rajan said the economy needs to be opened up in a sequential way in working out a balance in fighting the virus and facing the consequences of the economy .
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“Our capacities and resources are limited. Our fiscal resources are more limited than the West. What we need to do is to decide, how do we keep this economy together. When we reopen, is it sort of able to walk off the sick bed and not be dead at that point? Most immediately, keep people well and alive. Food is extremely important,” he said, adding that he and other economists like Amartya Sen and Abhijeet Bannerjee have talked about temporary ration cards.
“It is all too easy to have a lockdown forever , but obviously that is unsustainable for the economy .”
The economist said India should now leverage its Direct Benefit Transfer (DBT) network to protect livelihoods, keep people alive and “keep them from going onto the street protesting or going out looking for work during lockdown”.
Asked if India could gain any strategic advantage in a post-COVID-19 world order, the former RBI Governor said India could mould the international dialogue for a more multi-polar global order.
Coronavirus | Opeds and editorials
“What I think we can say is there will have to be a rethinking of everything in the global economy once we are out of this. If there is opportunity for India, it is in shaping that dialogue...In this situation, India can find opportunities for its industries, for its supply chains….”
Reversing roles, Mr. Rajan asked the Congress leader to share his views on how India is handling the pandemic challenge compared to the U.S. Mr. Gandhi said the two countries are different both in terms of scale and resources.
“The idea of governance in India is always about trying to control and I think that is one of the challenges that we are facing now. The disease cannot be controlled, it has got to be managed, as you said,” Mr. Gandhi said.
The Congress leader also said there is an infrastructure, but if there is division and hatred, that disconnects people.
Agreeing with him, Mr. Rajan said, “Having everyone believe that they are a part of this system, an equal part of the system, is essential. We cannot afford to be a house divided especially in these times when our challenges are so big.”
