 "India needs Rs 65,000 cr to save the poorest and their livelihoods: Rajan")
India would need approximately Rs 65,000 crore to help the poor and save their livelihoods during the coronavirus lockdown, former Reserve Bank of India (RBI) governor Raghuram Rajan said on Thursday.
In a video-conference call with Rahul Gandhi, Rajan said India's gross domestic product (GDP) was Rs 200 trillion, so if the government wanted to save the poor, it could afford to do that. "Most immediately, keep people well and alive. Food is extremely important. (There are) places where the public distribution system doesn’t go. Amartya Sen, Abhijeet Banerjee and I have talked about temporary ration cards... you have to treat this pandemic as a situation that is unprecedented," said Rajan.
The former RBI governor also said that cyclical lockdown would be devastating for economic activity and diminish credibility.
"Take even a second lockdown. Which means you haven’t been completely successful in reopening. That raises questions that if you re-open, will you go into a third lockdown? So, it does diminish credibility," replied Rajan to a question asked by Gandhi.
Rajan said it was impossible to have zero cases and keep infection in check. Batting for more tests to be conducted, he said India needed 2 million tests daily to get to the level of confidence the US had. "Clearly, with 25,000-30,000 tests a day, we are nowhere near that," he said.
Rajan also raised his concern over rising unemployment numbers. According to data from the Centre for Monitoring Indian Economy (CMIE), virtually 100 million more people have been put out of work due to the Covid-19 pandemic. He added that the economy needed to reopen in a measured way but as fast as possible so that people again start having jobs.
On governance, Rahul Gandhi said the Indian method was always about trying to control. But coronavirus could not be controlled; it needed to be managed, he asserted. "The level of inequality that you see in India, you simply cannot see in the United States."
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