At an event in New Delhi, Banerjee said corporate houses in India were sitting on a “pile of cash” without investing it in the economy. “There is no need for a further cut in corporate taxes. The corporate sector is sitting on cash and not investing due to a demand problem. The government needs to get the demand side going,” he said.
The government had cut the corporation tax rate from 30 per cent to 22 per cent in 2019.
He also emphasised the need to put money in the hands of the poor to increase demand. “I think you have to get the demand side going... you need to get money in the hands of people who will spend it now, people who need the money... get the money in hands of poorer people,” he said. "Studies show that if you give people cash, they spend it," he added.
Banerjee suggested that the government use existing infrastructure, such as the Jan Dhan Yojana, to provide the incentives. This, according to him, would not affect labour supply. He also spoke on a variety of other issues.
Commenting on farm loan waivers, he said they only provide benefits to a certain section of farmers who have availed loans. This, he said, was a sign of an underdeveloped machinery to help those in need.
Micro credit, Banerjee said, only helps 5 per cent of beneficiaries, adding that he did not believe it improved their standard of living.
When asked about the Citizenship Amendment Act, he said, “We should worry about creating structures that start making people feel vulnerable”.
Banerjee's statements come in the backdrop of the lowest GDP growth India has seen in over six years, with the economy growing at just 4.5 per cent in Q2FY20.