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A Stale Conversation Blown Out Of Proportion


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Raghuram Rajan, who is in the know-how of Indian economy, should have been candid and in-depth with his answers during his interview with Congress leader Rahul Gandhi.

Gandhi asked questions that were repeatedly heard of, but weren’t met with explicit suggestions.

Lets’s poke into the suggestions and remarks made by Rajan point by point.

*The government will need around Rs 65,000 crore to help the poor who are bearing the brunt of the Covid lockdown.

We do not know from where did Rajan get this number. Implementation authorities, however, would have appreciated Rajan if he would have elaborated on the nature of spending. Should it be spent in the form of cash transfer programme? In the food distribution form? Or, under MGNREGA?

Just to float a figure of Rs 65,000 crore is not a solution in itself. Rajan’s reply should have been more tangible, but wasn’t. This really was Rajan’s surprising omission.

*India should conduct half a million Covid tests per day.

This absolutely is not feasible. In the hindsight, do we have the crisis as United States is suffering from? In cities like New York and Washington DC, there has been ample evidence of community transmission.

We, of course, have some hotspots, thanks mainly to the Tablighi Jamaat, who violated all the lockdown norms in the name of Islam. But, do we have the same scale of community transmission as the United States has?

One cannot throw a random number and say, “Oh just because US is doing 150,000 tests per day, we need to do half a million.” In one breath, Rajan talks about inadequate resources and in the other, brags about having half a million tests per day.

He needs to understand there is no evidence of such great community transmission happening in India yet.
Of course, there were threats of community transmission in certain areas of Delhi, but was brought under control by increasing the tests.

Therefore, the point that is made here is, there has to be a calculated decision making, instead of going in for random testing.

*Excessive centralization of powers by the Narendra Modi government is a hurdle against quick recovery from the crisis.

Some people may believe that decentralisation is important, but to say centralisation is a problem at times like this, is needless. One can imagine the damage it could have caused to the human capital, which runs the economy, if the lockdown decision was not taken by Prime Minister Narendra Modi.

Of course, there will be some states, which would not be aligned to Modi’s vision in terms of politics, but at the times like these, a nation wants to hear from its Prime Minister or President, which is happening in the US, Germany, France, Italy and everywhere else.

We do understand, from where this centralisation debate is coming from. They are hungry lot, for being out of power for six years.

Another point made was – India needs to give more power to panchayats. A very pertinent question here is – can we expect the head of a panchayat to discuss manufacturing opportunities with a CEO of a US company?

Rajan could also have raised points such as decentralisation of healthcare under Ayushman Bharat; suggesting ways to do right things to help US companies diversify manufacturing from China to India.
Just floating the need for giving more power to panchayats is inadequate.

*The continuance of a parallel “infrastructure of hatred” and disharmony is counter-productive

To say that social harmony is required and infrastructure of hatred is counter-productive, does no good. The whole world knows, it is a mere propaganda carried out by the Lutyens media, which has been shred to pieces by even Muslim nations – Oman, Suadi Arabia, Kuwait and others.

At this point of time, people are looking at tangible solutions, and to mock at the unity of the country is incomprehensible.

*Open the economy sequentially and keep migrant workers alive and feed them

Weren’t these things discussed? They were addressed by the Prime Minister in the very first week of the lockdown. His government made special arrangments under the PDS for foodgrains to reach the poor. In fact, they were given extra ration at home. The government has already provided Rs 28,256 crore through the Pradhan Mantri Garib Kalyan Yojana out of the total package of Rs 1.7 lakh crore.

We beg to know what really was the focal point here.

*Voicing concern over the economy due to lockdown

Rajan voiced economic concerns as if it was not obvious for the Indian diaspora. Jobs are being lost and paycuts are happening. Of course, the concerns are unprecedented, which is not at all a surprise.

There was no clarity on – what government needs to do to kickstart the economy. One also expected Rajan to have given gyaan on the mantra for restarting MSME units.

He also did not talk about fiscal deficit. Should India let it go? Or, should it be conscious about it? Instead, he compared India’s fiscal deficit with US. That’s not enough.

Rajan also did not speak about monetisation of RBI debts, which could have been very interesting perspective, coming from an ecoomist like him.

*Realisation of DBT benefits

Going back to his tenure as RBI Governor, he was the first person to be skeptical about it. Today, under the Jana Dhana Yojana, there are 382 million bank accounts, which is a huge number. So, DBT is absolutely working.

To say that the government needs to realise the benefits of DBT is out and out a bluff.

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