Raghuram Rajan’s prescription for an ailing economy hit by coronavirus; save both lives, livelihoods

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Updated: April 27, 2020 1:34:16 PM

Former RBI Governor Raghuram Rajan has said that the lockdown situation due to coronavirus cannot persist forever as both lives and livelihoods are important.

Raghuram Rajan is former RBI Governor.

As the government extended lockdown till 3rd May with speculations still rife that it might still not be over by next week, former RBI Governor Raghuram Rajan has said that the lockdown situation due to coronavirus cannot persist forever as both lives and livelihoods are important. “It is not a stump choice — saving lives or saving livelihoods. You have to do both. On one hand, you can’t remain in a lockdown forever, as that would be focussing more on saving lives. But, in the process if people don’t have livelihoods, it may also impact their lives,” he told ET Now in an interview. To cope with India’s ailing economy, he said that the government must now think of staggered restarting of the economy. 

“We have to make a tradeoff… we have to think of a staggered restarting of the economy. Start first with the areas that are least vulnerable and move to the areas where it is most vulnerable,” he said. Raghuram Rajan had earlier called the coronavirus pandemic the greatest emergence since independence for India. With India being under a lockdown for over a month now, many people are out of jobs and rely on government and past savings to sustain themselves. Migrant workers and daily wage earners are especially vulnerable in the lockdown period. 

Earlier, Raghuram Rajan, along with Nobel laureates Amartya Sen and Abhjit Banerjee had said that the government must now think of extending both monetary and food help to not only the poor but also to those who could be on the verge of falling into poverty. “A huge number of people will be pushed into dire poverty or even starvation by the combination of the loss of their livelihoods and interruptions in the standard delivery mechanisms,” the trio wrote in The Indian Express two weeks back. The government had declared a financial relief package of Rs 1.7 lakh crore for the most vulnerable sections of the society, days after the lockdown was announced.

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