His comments come amid reports of multinational corporations preparing the ground to shift base to nearby countries which have cheap labour — like Taiwan, Indonesia and India — due to their distrust in China for hiding the extent of the Covid-19 crisis before it engulfed most of the world.
Prime Minister Narendra Modi and Union minister Ravi Shankar Prasad had also asked states to utilise the opportunities thrown up by the coronavirus crisis in the world to their advantage.
“China is being blamed now for the coronavirus outbreak. Even people are saying that India stands to benefit as businesses will shift from China and come to India. But that may not be true,” Banerjee told Bengali news channel ABP Ananda on Monday evening.
“What happens if China depreciates its currency. In that case, Chinese products will be cheaper and people will continue to buy their products,” he added.
Following the Centre’s call, some states had engaged with foreign firms to explore business possibilities. Uttar Pradesh engaged with over 100 US-based companies including Lockheed Martin, Adobe Inc, Honeywell, Boston Scientific, Cisco System, Fedex, etc to negotiate business terms. Three BJP-ruled states – UP, MP and Gujarat – also decided to tweak their labour laws to incentivise economic activity. The move, however, faced backlash from the Opposition and trade unions.
Banerjee, who is also a member of Global Advisory Board formed by the West Bengal government to prepare a roadmap for COVID-19 response in the state, said while countries like the US, UK and Japan are spending a high share of their respective GDPs on relief packages, India has spent less than one per cent of its GDP at Rs 1.70 lakh crore.
The economist reiterated his suggestion to revive the economy by putting cash in the hands of the poor to boost their purchasing power. “The poor people now do not have the money and they hardly have any purchasing power. There is no demand as well. The government should give money in the hands of the common people because they run the economy, not the rich,” he said.
The economist said the money should be distributed to them in phases over a period of three to six months, adding that it won’t be a problem even if they do not spend it.
On the migrant workers’ crisis, Banerjee said it is the Centre’s responsibility to look after them. “We have not thought of their problems that they will face. They have no shelter and money in their pockets,” he said.
“There is a need to issue emergency ration cards to all for a period of three or six months,” he added.
The MIT professor said the central government has taken some steps to provide relief to the people, of which extending moratorium on loan repayment is one.
“There is need for taking other steps as well. But the problem is where is the demand,” he said.
On the nationwide lockdown, Banerjee said while the lockdown was extended in phases and people were made aware of social distancing, the country has not reached a stage where the economy could be run in this manner.
Regarding Covid-19 testing, he said India is a big country and the quantum of test should have been more from the beginning. “We do not know the extent of the coronavirus outbreak as there was no population testing done,” he said, adding that more testing should be conducted before lifting the lockdown.
“More the test, lesser will be the death rates. In West Bengal, the number of tests has increased now. So, incremental death rate is gradually falling,” he added
(With inputs from PTI)
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