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Economic slowdown may impact poverty alleviation, says Banerjee

Nobel laureate Abhijit Banerjee speaking at a session during the Jaipur Literature Festival on Sunday.Rohit Jain ParasRohit Jain Paras

Nobel laureate Abhijit Banerjee speaking at a session during the Jaipur Literature Festival on Sunday.Rohit Jain ParasRohit Jain Paras  

It might take a long time to get out of the difficult situation, says Nobel laureate

Nobel laureate and economist Abhijit Banerjee on Sunday said the slowdown in the economy, which had posed a serious challenge to the country, might adversely impact poverty alleviation because the urban and rural sectors depended on each other for creation of jobs and availability of low-skilled workers. “There is no early end to the economic slowdown that has gripped India,” he said.

At a session on “Poor economics: fighting global poverty” at the Jaipur Literature Festival here, Dr. Banerjee said it might take a long time to get out of the difficult situation, as there was not enough money to improve the economy. “There is a need to work on several things gradually. We have a great demand deficit... People are not spending because they are not confident.”

The Indian-American economist, who along with two others won the Nobel Economics Prize in 2019, said the slowdown in the urban sector was bound to have “negative consequences” for the entire economy. “Besides, the banking sector is stressed and the government is not in a position to bail it out,” he said.

Laying emphasis on a multi-pronged approach for poverty alleviation, Dr. Banerjee said it required “many silver pallets rather than a single silver bullet” to deal with the issue. “Like cancer, poverty has several problems. Some people are education-poor, some are health-poor and some asset-poor. You have to figure out what is missing.”

The 58-year-old economist said the country needed a “better Opposition” for effective governance. “When the Opposition is weak, it can lead to a situation where the government can think it can do anything.”

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