Raghuram Rajan prefers cash transfer to migrants
Former RBI governor Raghuram Rajan has called India's Rs 20 lakh crore stimulus inadequate in providing for recovery of an economy pummelled by Covid-19. Rajan said the package gives free foodgrains but migrant workers, rendered jobless by the lockdown, need money to buy milk, vegetables and cooking oil and pay rent. The world is facing the greatest economic emergency and almost any resource is inadequate, he said.
“I think it is particularly so in the case of India because we have years of economic drift in which our growth had slowed, our fiscal deficit has gone up. There is a lot more we need to do to put economy back on track. We have to pull all the stops,” he said in an interview to Karan Thapar for a news portal .
“The package has some good points but it probably needs to do more,” he added.
The former chief economist of the IMF said ways have to be found to give relief to people and companies affected by coronavirus and the ensuing nationwide lockdown.
“We got to repair places in the economy that need repair. This includes some of the big firms, this includes banks, and of course this includes MSME. We need to provide for recovery that means some kind of stimulus so as to get the recovery going. And we need reforms,” he said.
Rajan added that the package failed not just in providing resources for recovery of an economy pummelled by Covid-19 but also in addressing the distress faced by sections such as migrant workers who need money along with foodgrains.
The government has in its economic stimulus package provided for 5 kg of foodgrain and Rs 500 per month for three months to poor women having Jan Dhan accounts.
Migrant workers have been left “adrift” after most economic activity in the country came to a halt following the imposition of a lockdown beginning March 25.
While the government has given free foodgrains, migrant workers need money, he said.
Giving foodgrains to unemployed migrant workers, the poor and the vulnerable was not enough, the former RBI governor said. PTI
“It’s important to both send more money and open foodgrain. They need vegetables, they need oil to cook, they need other stuff that means a certain amount of money along with foodgrain. They need shelter,” he said.