Aggressive quantitative easing and generous direct benefit transfers are needed to tackle the slowdown in the economy due to Covid-19, according to Nobel Laureates Esther Duflo and Abhijit Banerjee.

Interacting with industrialists over a webinar organised by FICCI, Banerjee said it was time to take aggressive macro policy measures, and take risk even at the cost of inflation.

“We should print money, and give that money, without worrying much about monetary targets. We can avoid 1929, and we can be more like 2008-09 if we are more aggressive,” said Banerjee, adding that there were concerns that India might be conservative in taking aggressive macro-economic policy decisions.

“Fortunately India has infrastructure for direct benefit transfer in place….The industries should not collapse and putting moratorium on debt is important,” said Duflo, adding that the moratorium should cover interest payment as well.

Banerjee said that there was no need to immediate need to transfer all the money, but there should be assurance from the government about such transfer in future.

“Liquidity is not the problem at present. What is frightening people are the long term problems. We really need to get that extra income in the hands of the people,” said Banerjee.

Investment in Pharmaceutical

There is an immense opportunity for India to grab the market for pharmaceuticals and hospital infrastructure in the days to come, said Duflo and Abhijit Banerjee.

“The way we see the present situation, there should be a vaccine by fall. And India should not miss this opportunity. We have good production capacity and even if only the elder population needs to be vaccinated, that’s a challenge as well as an opportunity. It is worth thinking about building that capacity for vaccines,” said Banerjee.

Duflo said India has a strong advantage in the pharmaceutical sector, and it can utilize it to beef up capacities.

West Bengal

West Bengal needs to ramp up testing of Covid 19, so as to get accurate data and identify hotspots to tackle the problem, said Banerjee.

West Bengal chief minister Mamata Banerjee on Monday had announced that Banerjee would be in state’s advisory panel on Covid 19.

“In West Bengal, there is a willingness and there is a fair amount of information campaigns. We need to do more testing and identify hotspots,” he said.

On being asked if India should extend lockdown, Banerjee said, “Today the numbers show uptick and the curve is getting steep. However, we need to wait for a week to see,” he said.

During lockdown, harvesting must be managed well, with. Also, with the Rabi harvesting season approaching, there should be enough infrastructure to ensure that the product don’t go waste, he added.