Nobel laureate Abhijit Banerjee, while speaking with Congress leader Rahul Gandhi on Tuesday, said that direct cash transfer is the only way to benefit not only the poor, but also those who have been severely affected by the long spell of lockdown.

After former RBI governor Raguram Rajan, Rahul Gandhi on Tuesday engaged in a conversation with economist and Nobel laureate Abhijit Banerjee to discuss the economic measures India can take to help those suffering in the lockdown.

In a video conference chat, Abhijit Banerjee said, “Direct cash transfer is the way out, not only for the poor, but also those hit by the long spell of lockdown.”

Talking about transferring benefits to the poor, Abhijit Banerjee said the government needs a mechanism with which the Centre will transfer the money to the state governments to reach the poor.

“The real challenge is for people who are not covered by social security schemes. No such security cover is there for a large population like the migrant labourers,” Abhijit Banerjee said.

He added, “Aadhaar portability could have worked wonders for migrants like by giving access to food grains through the Public Distribution System (PDS)”.

The economist also advised that the government can bring a temporary ration system for those in need and suspend all other ration cards temporarily.

In the conversation, Rahul Gandhi observed that small business are facing a severe cash crunch.

Abhijit Banerjee replied saying, “We need a large stimulus package like the US. India has announced a package that is about to 1% of its GDP and US has announced a package of 10% of its GDP.”

“People are not buying in these times and spending is the easiest way to revive the economy. We cannot shut the entire retail sector because they are situated in the coronavirus red zone,” observed Banerjee.

Speaking on the migrant labourers crisis, Abhijit Banerjee said, “The migrant problem cannot alone be handled by the state government and the Centre needs to manage this.”

To this, Rahul Gandhi added that the states should be given freedom to manage the lockdown but the present government at the Centre thinks otherwise.

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