COVID-19 Greatest Emergency Since Independence: Raghuram Rajan

Former RBI governor Raghuram Rajan - Sakshi Post

NEW DELHI: Amid the COVID-19 outbreak in India, former RBI governor Raghuram Rajan has said that India is probably facing its greatest emergency economically, since Independence. He suggested that the government must call on people with expertise and capabilities to manage affairs and asked the government to cut across the political aisle and call on Opposition members who have previously handled great stress like the global financial crisis.

Rajan said in a blog titled "Perhaps India's Greatest Challenge in Recent Times" on LinkedIn also cautioned that driving everything from the Prime Minister's Office will be of little help.

"There is much to do. The government should call on people with proven expertise and capabilities, of whom there are so many in India, to help it

manage its response. It may even want to reach across the political aisle to draw in members of the opposition who have had experience in previous

times of great stress like the global financial crisis.

"If, however, the government insists on driving everything from the Prime Minister's Office, with the same overworked people, it will do too little, too late," Rajan wrote.

On the greatest emergency since Independence, he wrote, "The global financial crisis in 2008-09 was a massive demand shock, but our workers could still go to work, our firms were coming off years of strong growth, our financial system was largely sound, and our government finances were healthy.

"None of this is true today as we fight the coronavirus pandemic," Rajan noted.

On the suggestions, Rajan said that the first step is to prevent the spread of the COVID-19 pandemic through widespread testing, rigorous quarantines and social distancing.

"The 21-day lockdown is a first step, which buys India time to improve its preparedness. The government is drawing on our courageous medical personnel and looking to all possible resources -- public, private, defense, retired -- for the fight, but it has to ramp up the pace manifold," he said, adding that the country will have to significantly increase the number of COVID-19 tests to reduce the fog of uncertainty as regards where the hotspots are.

Rajan, a professor of finance at the University of Chicago Booth School of Business, suggested that India should now plan for what happens after the lockdown if the virus is not defeated.

"It will be hard to lock down the country entirely for much longer periods, so we should also be thinking of how we can restart certain activities in certain low-infection regions with adequate precautions," he said.

Healthy youngsters, lodged with appropriate distancing in hostels near the workplace, maybe the ideal workers for restarting such activities, Rajan pointed out.

Noting that in the meantime, India obviously needs to ensure that the poor and non-salaried lower-middle class, who are prevented from working for longer periods, can survive, he said, "Direct transfers to households may reach most but not all, as a number of commentators have pointed out, and the quantum of transfers seems inadequate to see a household through a month."

The country is under a 21-day lockdown as part of larger efforts to curb the spread of the coronavirus.

(With inputs from NDTV and agencies)

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