Raghuram Rajan describes Corona Virus Pandemic as one of the most significant emergencies since the year 1947. Since independence, India has faced nothing of such sort. Rajan, who was former RBI governor, mentions that the government should keep spending on the poor on priority. The government should cut back or put on hold, the non-important, or less essential expenditures.
Mr. Rajan says that the Indian government should ensure that the poor and non-working middle class could survive. They are prevented from working for a more extended period post-lock-down.
He suggests that state and center governments should come together to figure out probable resolutions. Some combinations of public and NGO provisions, along with direct benefit transfers, will only help needy people to pass through the upcoming months.
He added that one consequence of not doing so was well witnessed. The movement of migrant labor to their hometowns. Another could be people breaking down lock-down if they cannot survive. They will want to get back to work if their necessities do not get fulfilled.
He writes that in the year 2008-09 at the time of the global financial crisis, the workers could still go to work. Even the financial system was healthy, and the government had sound finances. However, none of this is a condition today as we fight against COVID-19.
Rajan mentioned that it is extremely tough to the lock-down entire country for much more extended periods. Well, it is said that India reforms only in crisis. This tragedy will make us realize to focus on some significant economic and healthcare reforms.