Congress leader Rahul Gandhi on Tuesday had a video interaction with Nobel Laureate Abhijit Banerjee on the economic fall out of the COVID-19 outbreak, in the second installment of his thoughts with experts.

India should put in a large enough stimulus package to revive demand, Nobel laureate Abhijit Banerjee said on Tuesday, asserting that putting cash in the hands of people would be the best way to boost the economy post lockdown.

He suggested giving money into the hands of the bottom 60 per cent population to help revive demand.

"We really haven't decided on a large enough stimulus package. We are still talking about 1% of GDP. The United States has gone for 10 per cent of GDP," the noted economist said.

"We have done one thing that I think is wise, which is to kind of put a moratorium on debt payments. We could do more than that. We could even say that the debt payments for this quarter will be cancelled and will be taken care of by the government," he added.

To Gandhi's question as to whether some form of the Congress-proposed NYAY scheme or direct cash transfer to people was the need of the hour, Banerjee answered in the affirmative saying it should not be limited just to the poorest.

"I would say the bottom 60 per cent of the population, we give them some money, nothing bad will happen in my view. If we gave them money, well some of them might not need it. Fine, they'll spend it. If they spend it, it would have a stimulus effect," he said.

Banerjee also suggested that the government should hand out temporary ration cards to people to deal with the problem of food distribution.

He said another concern looking ahead post-COVID-19 and is a chain of bankruptcies. "Maybe writing off a lot of debt is the way to go," he suggested.

The other concern, the noted economist said, is the demand shortfall. "Getting some cash into the hands of the population is the best way to kick start the economy," he concluded.

Recently, Rahul Gandhi had spoken with renowned economist and former Governor of RBI Raghuram Rajan. He said Rs 65,000 crore was mandatory to help the poor affected by the pandemic-induced lockdown.