Nobel laureate and Ford Foundation international professor of economics, MIT, Abhijit Banerjee, said that he feels that the pandemic is not over yet with Covid-19 vaccines still far away. “We don’t have the basis to assume that we’re out of the pandemic,” Banerjee told IDFC Institute’s Dr Niranjan Rajadhyaksha on day 7 of Hindustan Times Leadership Summit 2020 on Thursday.
Banerjee said that it will take at least two quarters for the government to get everybody vaccinated.
On the state of the country’s economy, the Nobel laureate said that he doesn’t know “how quickly the recovery will be”.
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“We need a demand bounce as there has been a massive demand shock. Investment has been slow because our domestic economy is not providing huge rewards, hence people are sitting on their money and not investing,” he said.
{{/usCountry}}“We need a demand bounce as there has been a massive demand shock. Investment has been slow because our domestic economy is not providing huge rewards, hence people are sitting on their money and not investing,” he said.
{{/usCountry}}Describing the Covid-19 pandemic as a “wasted crisis”, Banerjee said that the government “could have done more on the fiscal side”.
“I have always taken the view that there should be more fiscal stimulus,” he added.
Banerjee talked about federalism in India and said that the size of states in the country is way too big. “We need much more federalism, Indian states are way too big,” he said.
On the budget for the upcoming fiscal year, Banerjee said the government should focus on “things which are visible”, such as infrastructure projects.
“The government should show that it is focussed on development. People like the assurance that growth will be restored. The government has a commitment toward ensuring growth,” he said.
On the ongoing farmers’ protest, Banerjee said that all negotiations will eventually have to go through some state government. “I think Haryana state government is well placed to do that,” the Nobel laureate stated.
Besides Banerjee, day 7 of the HTLS 2020 witnessed enriching sessions with Madhya Pradesh chief minister Shivraj Singh Chouhan, Punit Renjen, Global CEO, Deloitte, and Doug McMillon, CEO and president, Walmart Inc.