New Delhi: India needs Rs 65,000 crore to feed the poor during the COVID-19 pandemic and can afford to do that, former Reserve Bank of India governor Raghuram Rajan said during his interaction with Congress leader Rahul Gandhi on Friday.
Raghuram Rajan was deliberating on the economic impact of the COVID-19 in a conversation with former Congress president Rahul Gandhi.
To Gandhi's question on how much money would be needed to help the poor in the current situation, the former RBI chief said India needs Rs 65,000 crore to help the poor in the times of pandemic and considering its total GDP, it can afford to do that.
"Our GDP is 200 lakh crores, and out of that 65,000 crore is not a huge amount. So, we can do it. If this is for the poor and to save their lives and livelihoods, we must do it," he said.
India needs to be cleverer in lifting the lockdown and open up its economy in a "measured way" soon as it does not have the capacity to support people across the spectrum for too long, the former RBI governor said.
Rajan also asserted that India cannot afford to be a divided house especially in times when "challenges are so big".
'India can find opportunities'
When Gandhi asked whether India will get any strategic advantage post COVID-19, the former RBI Governor replied that such incidents rarely have any positive effects for the country, however there are certain ways through which the country can take advantage.
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"In this situation, India can find opportunities for its industries for its supply chain. But most importantly, we can try and mould the dialogue towards one which has greater place for more countries in the global order, a multipolar global order rather than a single or a bipolar Global order," he suggested.
'Need to think about people's livelihoods'
The former RBI Governor also warned that if India has to go for a third lockdown to check the spread of COVID-19, it will be devastating for the country's economy. "As a return from trying to bend the curve on infections and preventing hospitals for medical facilities from being overwhelmed, we have to start thinking about restarting people's livelihoods. It is all too easy to cover a lockdown forever but obviously that is unsustainable for the economy," he said.
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"It's very important to have as much information about the issue as possible. We have to start thinking about starting people's livelihood and it has to be sequenced. The reopening is not just about office, it is also about following social distancing on the way to and coming back from your workplace," he added.
'Need two million tests a day'
Stressing on the need to ramp up testing, Rajan said, "To be really confident about reopening up of economy you have to triple the number of tests which is currently happening in India. You have to do about two million tests a day if you have to get the level of confidence of United States."
On this point, the Congress leader replied that he saw a deep seated inequality in India. "One of the things that annoys me is the level of inequality. A lot of social change is required in India. Different states have different issues. A blanket solution will not work for India. But there is an element in our governance system of control," he asserted.
'Decentralisation is important'
On Rahul Gandhi's question regarding the "crisis" of centralisation, Raghuram Rajan replied, "I do believe that decentralisation is important both for bringing more local information to work but also about giving empowerment to people."
Dr Rajan brought back this question to Rahul Gandhi by asking him about Panchayati Raj which former Prime Minister Rajiv Gandhi brought to India, to which Gandhi replied that though it had a huge effect, but in the current time it is in retreat.
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"We are sort of moving back to bureaucratic, DM-bureaucrat based structure. If you look at southern states, they are doing a better job because they are more decentralized, but northern states are centralising power and they are taking away the power from panchayats and grassroots Organisation," he added.
The Congress leader also suggested that the closer these decisions are taken to people, the more ability they have to keep a check.
The dialogue between Gandhi and Rajan was a first of its kind initiative that was broadcast on Congress' social media handles.
Gandhi will also be later having dialogues with health experts on how to deal with the pandemic, besides talking to experts in different fields on the effect of the novel coronavirus.
(With inputs from PTI)
