65,000 Crore Rupees Needed to Save The Lockdown-Hit Poor: Rajan to Rahul Gandhi

Former Congress President Rahul Gandhi recently joined renowned economist and former Reserve Bank of India (RBI) governor Dr. Raghuram Rajan in a video conferencing session, which was posted on social media platforms on 30th April 2020.

In the meeting that lasted for close to 30 minutes they discussed various aspects of the lockdown and the measures taken to combat the prevailing COVID-19 situation in the country. Dr. Rajan, who is presently a Professor of Finance at University of Chicago’s Booth School of Business, answered questions put forward by Rahul Gandhi relating to the steps so far taken and the ones to be taken next.

Dr. Rajan particularly talked at length about the impact of the coronavirus on the economy and how detrimental a second or third lockdown, as well as a cyclical lockdown would potentially be on the country, as they would all diminish trust and credibility. Dr. Rajan also explained the intricacies of the testing system and how the situations differ in India compared to the USA or the European countries.

They also talked about budgetary limits – how several things must be managed together simultaneously due to a shortage of adequate resources – like shelter and medical facilities for migrants, keeping people alive and well, and ensuring livelihoods, particularly for those on the poorer side.

Rahul Gandhi in conversation with Dr. Rajan (Credits: INC YouTube Channel)
Rahul Gandhi in conversation with Dr. Rajan (Credits: INC YouTube Channel)

The following are some excerpts from the transcript posted by the National Herald:

Rahul Gandhi: Dr. Rajan, how much money will be required to help the poor to give direct cash (to the poorest)?

Raghuram Rajan: Approx. 65,000 crores. Our GDP is 200 lakh Crore, out of that 65,000 Crore isn’t that much. We can do it. If it is to save the lives of the poor, it must be done.

Rahul Gandhi: Right now, India is in a difficult situation. But after COVID pandemic will India gain any strategic advantage because of this pandemic? 

Raghuram Rajan: These kinds of incidents rarely have positives for any country. There are ways countries can take advantage of. What I think we can say is that there will have to be a rethinking of everything in the global economy once we are out of this.

If there is opportunity for India, it is in shaping that dialogue. Being more of a leader in that dialogue because it is not one of the two big warring parties. But it is a big enough country to have its voice heard in the global economy.

In this situation, India can find opportunities for its industries, for its supply chains. But most importantly, we can try and mould the dialogue towards one which has greater place for more countries in the global order, a multi polar global order rather than a single or a bipolar global order.

Raghuram Rajan: …even as you are fighting the virus, the rest of the economy is atrophying in lockdown. Certainly people need to be fed. Situation of migrants on the move, they need shelter, perhaps medical facilities too. This is something that has to be done simultaneously.

I think there has to be prioritisation. Our capacities and resources are limited. Our fiscal resources are more limited than the West. What we need to do is to decide, how do we keep this economy together. When we reopen up, it is sort of able to walk off the sick bed and not be dead at that point.

Most immediately, keep people well and alive. Food is extremely important. Places where public distribution system doesn’t go, Amartya Sen, Abhijeet Bannerjee and I have talked about temporary ration cards. But you have to treat this pandemic as a situation that is unprecedented.

We need to break norms to tackle what is needed. While keeping in mind that there are overall budgetary limits. There are only so many resources that we have.

As per reports, this is the first of a series of planned meetings by Rahul Gandhi with experts from various fields, which appears to be part of a plan to differentiate and enhance the public image and perception of the erstwhile Congress president. More such sessions are expected to take place in the coming future.