Raghuram Rajan called the government’s package of providing free foodgrains to migrant workers, insufficient. Raghuram Rajan, former RBI Governor, said migrant workers need jobs, money to buy food essentials, and money to pay rent. He called India’s Rs 20.9 lakh crore stimulus inadequate for recovering the hammered economy.
Lockdown imposed by the government due to the coronavirus left migrant workers stranded. With no means of transportation, they walk to their homes. Raghuram said that economy is shattered and the government should consult the best talent in the country. He added that the Government should not worry about who is across the political aisle. He further said that PMO cannot handle the situation all by himself. The current situation is ugly.
Rajan said the damage done by the coronavirus is not the only concern, but, the government have to fight the preceding 3-4 years of economic drift.
Rajan said the economic recovery included reviving the construction sector and pushing forcefully ahead with infrastructure development.
If further measures not announced by the Government, Rajan said that the state’s economy would be heavily constrained.
He said the government should not worry about what the rating agencies would do if the fiscal deficit grew because of fiscal measures to heal the economy and people.
These agencies can be told that increased spending is necessary to preserve the economy but also that as soon as possible India will return to the path of fiscal rectitude, he said.
Raghuram Rajan: We Have To Repair Places In The Economy That Need Repair
Rajan said that the announced economic package includes loans, which takes time to work. But, Hunger needs an immediate solution, said Raghuram.
In the economic relief package, the government announced loan distribution to MSMEs. MSMEs, one of the most indebted sectors, this package would only add to their indebtedness, Rajan said.
Further, he said that the government should provide debt relief to the bleeding Indian airlines.
Big industry segments like airlines, tourism, car manufacturers, and construction have been grounded by the lockdown
Raghuram said that the financial sector had been in deep distress for a long while before this crisis struck. It needs re-structuring, re-capitalisation and the hole in the leaking bucket must be plugged.