Former Reserve Bank of India (RBI) governor Raghuram Rajan has said that India needs Rs 65,000 crore to feed the poor during Covid-19 pandemic and can afford to do that with a GDP of about Rs 200 lakh crore.
Rajan was in dialogue with former Congress president Rahul Gandhi as part of his series of video conversations with global and Indian thought leaders to discuss the Covid-19 crisis and its consequences on the Indian economy.
“Rs 65,000 crore for poor is doable as it is not much compared to a GDP of about Rs 200 lakh crore,” he said in response to a question how much would be needed to be distributed among the poor to tide over the crisis triggered by the deadly coronavirus.
Rajan said India needs to be clever in lifting the lockdown and open up in measured way as the country does not have the capacity to feed the people for long.
Stressing the need for aggressive testing, he said, “I don’t think we have to aim for 100% success and have zero cases when we open up. That is unachievable. What we have to do is to manage the reopening so that when there are cases, we isolate them.”
Asked by Gandhi that India is a big country and its ability to test like the United States or the European countries is comparatively limited, the former RBI governor said, “You are talking about 2 million tests a day in India if you have to get the level of confidence that you have in the United States. And clearly, we are nowhere near that. I think we are somewhere around 25,000 or 30,000 tests a day at this point.”
Rajan evaded the questions on centralisation of power and the authoritarian way of governance.
However, he insisted that social harmony is a public good as Indian cannot afford to have its houses divided in times when challenges are big.
On opportunities after the Covid-19 situation, Rajan said India can help mould dialogue post-pandemic to make space for multi-polar global order. “There will have to be rethinking on everything in global economy once we are out of this pandemic. India can find opportunity for its industry and supply chain in the world. It can also help make its voice heard in the global order,” he added.
