Nobel laureate Abhijit Banerjee meets PM Modi, backs bureaucratic reforms

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Published: October 23, 2019 2:30:06 AM

In his recent interviews, Banerjee said the government’s move last month to sharply cut the corporate tax rates might not reverse a demand compression

Separately, Banerjee voiced concerns about the current banking crisis and pitched for paring down the government’s stake in state-run lenders to below 50% for decisive policy-making.

Nobel laureate Abhijit Banerjee on Tuesday met Prime Minister Narendra Modi and indicated his support for the government’s efforts to reform bureaucracy by making it more responsive to views of the people on the ground.

Talking to media after the meeting, Banerjee said the Prime Minister also joked about how the media was trying to extract “anti-Modi” remarks out of him. Banerjee’s wife Esther Duflo, a French-American economist and co-recipient of the Nobel prize in economics was not present in the meeting.

Separately, Banerjee voiced concerns about the current banking crisis and pitched for paring down the government’s stake in state-run lenders to below 50% for decisive policy-making.

Calling for “important and aggressive changes” to address the current banking crisis, Banerjee said there was need for the government’s stake dilution in banks so that the decisions are taken without fear of the Central Vigilance Commission (CVC).
Commenting on his meeting with Modi, Banerjee said: “The Prime Minister was kind enough to give me quite a lot of time and to talk about his way of thinking about India, which was quite unique because one hears a lot about policies but one rarely hears about the thinking behind it.”

“He talked about the way he sees governance in particular, and why in some sense the mistrust of some people on the ground colours our governance… and therefore creates structures of elite control over governance process…. In that process, he very nicely explained how he is trying to reform the bureaucracy in India to make it more responsive….to expose them (bureaucrats) more to the reality on the ground,” the noted economist added.

Banerjee said it was “important for India to have a bureaucracy that lives on the ground and gets its stimulus from how life is on the ground and without that we get an unresponsive government”.

Earlier in the day, Modi had termed his meeting with Banerjee as “excellent”. “His passion towards human empowerment is clearly visible. We had a healthy and extensive interaction on various subjects. India is proud of his accomplishments…,” Modi tweeted.
Banerjee, who was credited by the Congress for the income support scheme it had floated in its 2019 Lok Sabha election manifesto, however, has been criticised by some BJP leaders.

In his recent interviews, Banerjee said the government’s move last month to sharply cut the corporate tax rates might not reverse a demand compression. Instead, he has been favouring the idea of taxing the rich more while making cash available to the poor to boost consumption and beat the impact of the economic slowdown. Earlier, he had also criticised demonetisation.

Banerjee, a professor at Massachusetts Institute of Technology, won the Nobel prize for economics jointly with wife Duflo and Michael Kremer of the US for “experimental approach to alleviating global poverty”.

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