India needs to open economy and in a measured way: Raghuram Rajan

India needs to be cleverer in lifting lockdown and open up its economy in a “measured way” soon as it does not have the capacity to support people across the spectrum for too long, former RBI governor Raghuram Rajan said on Thursday (April 30). He was deliberating on the economic impact of the COVID-19 in a conversation with former Congress president Rahul Gandhi.

To Gandhi’s question on how much money would be needed to help the poor in the current situation, Rajan said India needs ₹65,000 crore to help the poor in the times of pandemic and considering its total GDP, it can afford to do that.

Rajan also asserted that India cannot afford to be a divided house especially in times when “challenges are so big”.

The dialogue between Gandhi and Rajan was a first of its kind initiative that was broadcast on Congress social media handles.

“We have to be cleverer about opening up…We need to open up in a measured way but as fast as possible so that people start having jobs. We don’t have the capacity to support people across the spectrum for too long. Being a relatively poor country, people start out with significantly lower reserves,” Rajan said.

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“It is all too easy to have a lockdown forever, but obviously that is unsustainable for the economy,” the economist said.

Gandhi said infrastructure connects people and gives opportunity, but if there is division and hatred, that disconnects people. “There is an infrastructure of division and hatred and that causes as big a problem,” he said.

Agreeing with Gandhi, Rajan said, “Social harmony is a public good. Having everyone believe that they are a part of this system, an equal part of the system is essential. We cannot afford to be a house divided especially in these times when our challenges are so big.”