"Rs 65,000 Crores Will Be Needed To Bounce Back": Former RBI Chief Raghuram Rajan To Rahul Gandhi On COVID-19

In a video interaction released by the Indian National Congress, the distinguished economist talked about the impact of the coronavirus pandemic on the economy, he said that a prolonged lockdown would not be sustainable for the economy.

"We will need ₹65,000 crore, it is not that much. This is to save the lives of the poor," Raghuram Rajan said to one of the questions asked by the former Congress president.

Rajan opined that while it was "all too easy to have a lockdown forever, but that would not be feasible for the economy".

"We need to be cleverer in lifting the lockdown. We need to open up in a measured way as India does not have the capacity to feed people for long. We have to manage the reopening so when there are cases we isolate them," he said.

Reportedly, this is the first in a series of video-dialogues of the Congress MP with intellectuals on planning a path to the rehabilitation after the pandemic.

Rajan, who is currently a professor at the University of Chicago, was appointed as governor of the RBI or Reserve Bank of India in 2013 for three years, by the Congress-led United Progressive Alliance (UPA) government.

"One of the things that annoy me is the level of inequality. A lot of social change required in India. Different states have different issues. A blanket solution will not work for India. But there is an element in our governance system of control. You cannot control COVID-19. But I think this is historic, even before the British. That is one of the challenges we are facing," Gandhi replied when Rajan asked him how he compared the response in India and the US.

Rahul Gandhi further asked Raghuram Rajan if there will there be a strategic benefit for India post-COVID-19 to which Rajan replied that here are ways countries can take advantage of the situation. In this situation, India can find opportunities for Its industry.

The Moody's Investors Service on April 28 slashed India's growth forecast to 0.2 per cent for the 2020 calendar year from the earlier projection of 2.5 per cent released in March.

According to Moody's Global Macro, Outlook 2020-21 all G-20 advanced economies was projected to contract by 5.8% in 2020.

However, the US economy shrank at a 4.8 per cent annual rate last quarter as the coronavirus pandemic shut down much of the country and began triggering a recession that will end the longest expansion on record.