Nobel Laureate Abhijeet Banerjee has recently asked India to print more money and transfer them to the poor class of people to increase demand in the market to tackle upcoming recession post COVID-19.
Reference:
https://m.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262A lot of economists will say it is a bad idea because later it will become very difficult to arrest inflation rate. But increasing the demand is a major challenge as well.
Voice your opinion! Will be good or bad step for a diverse country like India?
it depends: do you want stability or revolution?
the lockdowns are hardest on the poorest populations, who have no savings, live in overcrowded slum conditions, and are worst equipped for a complete economic stoppage. if this continues for months and nothing is done to mitigate their suffering, they will begin rioting and revolting and taking by force what they need to survive. with a population like india's, no police or armies could ever stop them.
the question for policymakers is, do you want millions and millions of hungry poor rioting in the streets (which will also make the pandemic grow exponentially as society stops heeding social distancing and quarantines)? or do you want stability at the cost of future inflation?
if i were a policymaker trying to maintain the rule of law, the answer seems obvious.
@avikz it’s quiet difficult to answer this question, but in my personal opinion if the Indian government wants it’s citizens to survive in the long run then they may have to take a risk, and print more money and then deal with any issues that pop up later. @figmentofmyass if we take your hypothetical scenario, and just for a minute imagine that a majority of India’s poor population comes on the road and riots, then India will indeed suffer damage and therefore I feel it’s best to pay them some cash and control the situation before it gets out of hand.