Nobel Laureate Abhijit Banerjee on Tuesday said India was among the worst-performing economies in the world and that the government’s economic stimulus was inadequate to tackle the problem.
He, however, said that the country will see a revival in growth in the July-September quarter of the current fiscal.
Speaking at a virtual event, Dr. Banerjee said the country’s economic growth was slowing down even before the COVID-19 pandemic hit. Dr. Banerjee, a professor at Massachusetts Institute of Technology, said he did not think that India’s economic stimulus was adequate.
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“India’s economic stimulus was limited. It was a bank bailout. I think we could have done more,” he said. The stimulus measures “did not increase consumption spending of lower income people as the government was not willing to put money in the hands of the low-income population,” he noted.
On inflation, he said India’s growth strategy was that of a closed economy with the government creating lots of demand, which resulted in high growth and inflation. “India had 20 years of high inflation and high growth. The country benefited a lot from stable high inflation in the last 20 years,” he opined. He added that India needed to be more competitive globally.