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‘Instead of corporate tax cuts, give money to the poor’

Discussing ideas:Abhijit Banerjee, centre, and Esther Duflo at the launch of their book on Friday.special arrangement

Discussing ideas:Abhijit Banerjee, centre, and Esther Duflo at the launch of their book on Friday.special arrangement  

They will spend it immediately and kick-start demand in the economy, says Nobel laureate

Instead of cutting corporate taxes, the government should put money in the hands of poorer people who will spend it immediately and kick-start demand in the economy, said Economics Nobel Prize winner Abhijit Banerjee.

He was speaking at the launch of his latest book, Good Economics for Hard Times , on Friday, along with his co-author and fellow prize winner Esther Duflo.

“The clear fact is that the corporate sector is actually sitting on cash and is not investing. Why is it not investing? Because every sign of a demand problem is there,” said Dr. Banerjee.

“We have to get the demand side going. And for that, you need to get the money into the hands of the people who will spend it now,” he said.

Dr. Duflo added that the present government’s efforts to ensure that the poor have bank accounts would make it possible to implement such a strategy.

Weighing in on the Citizenship (Amendment) Act, Dr. Banerjee said: “We should be worried about creating structures of the State, power structures which make you so vulnerable, you can be extorted in many ways.”

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