India should have big stimulus package to revive demand; give money to bottom 60 pc:Abhijit Banerjee

India should come out with a large enough stimulus package to revive demand, Nobel laureate Abhijit Banerjee said on Tuesday, while favouring putting cash in the hands of the bottom 60 per cent population to help boost the economy post lockdown.

Banerjee, while talking to Congress leader Rahul Gandhi through video-conferencing, suggested several measures like increasing people's spending by giving money to help revive demand, give temporary ration cards for providing grains to the poor and for cancelling the debt for a quarter.

He was deliberating on the economic impact of the COVID-19 pandemic with Gandhi as part of a series of dialogues broadcast on Congress' social media handles.

The Nobel laureate debunked the theory that only a strongman could take the right decision during such a pandemic, saying it has proved disastrous in the US and Brazil.

"The US and Brazil are two countries that are messing up right and left. These are two 'strongmen' behaving like... pretending like they understand anything... but even what they say every day is kind of laughable. If anyone wanted to believe in the strongman theory, this is the time to disabuse themselves," he said.

Noting that the real concerns are if the economy will revive, he said, "I think we should try to be optimistic about the survival of the overall economic well-being of the country. Just take the right actions."
He said the country put a moratorium on debt payments, but "we could do more than that. We could even say that the debt payments for this quarter will be cancelled and will be taken care of by the government."
On the demand for giving a financial package for the MSME sector, Banerjee said, "It is not clear that targeting the MSME sector is the right channel. It is more reviving demand. Giving money in the hands of everybody, so that they can buy in stores or they buy consumer goods."