'Congress' NYAY was not well designed', Abhijit Banerjee tells News18: Nobel laureate speaks on economic slowdown, Modi's Ayushman Bharat

Indian-American Abhijit Banerjee, who jointly won the 2019 Nobel Economics Prize with Esther Duflo and Harvard's Michael Kremer, on Saturday said the Congress' Nyutam Aay Yojana (NYAY) scheme, on which he advised Congress leader Rahul Gandhi, was not particularly well-designed and said the UPA, had it come to power, would have to make adjustments to the scheme due to political and economic pressures.

Abhijit Banerjee. Image courtesy - MIT

Banerjee, one of the world's leading economists, in an interview with News18's Marya Shakil, spoke on a variety of subjects, including the Congress' Nyutam Aay Yojana (NYAY) scheme, the economic slowdown, his advice for the finance minister, the government's flagship Ayushman Bharat scheme and Prime Minister Narendra Modi's popularity.

Banerjee, speaking about the Congress' NYAY scheme, said, "The NYAY scheme was not particularly well-designed. My role was not to make the scheme. I only provided information." He added that he felt the Congress was sincere in its efforts "in the very real sense that they wanted to stamp a Congress view of policy that would sustain them in the future".

"The Central government chooses tax rates," he added. "Only the Central government is capable of implementing and running a scheme like NYAY."

Addressing the controversy surrounding his wife Esther — the youngest recipient of the award in its 51-year history and only the second woman to win the prestigious award — who was described in multiple headlines as "the wife of Abhijit Banerjee", he said he "felt bad about it", but added that he only felt thus until he discovered that in France the headlines read "professor Esther and spouse".

"I felt it was a level playing ground of nationalistic abuse," Banerjee quipped.

He added that he wished more women entered economics and that the field suffers from having too few women.

Banerjee described the government's flagship Ayushman Bharat scheme, the Pradhan Mantri Jan Dhan Yojana and the Pradhan Mantri Ujjwala Yojana as good ideas in the long run, but said that other than Ujjwala, "none of them are putting cash into anyone's hands".

In the long run, Ayushman Bharat will save some people from having to sell their homes to pay for their healthcare of their mother, Banerjee added. "Jan Dhan will get people to save money long-term".  Speaking on LPG subsidies and linking Aadhaar and bank accounts, Banerjee said they were good steps in the right direction.

Expounding on the economic slowdown, Banerjee said it is a good time to be aware of a big problem. "The Indian government is increasingly aware and increasingly concerned about it," he added. Asked if he had any advice for Finance Minister Nirmala Sitharaman, Banerjee said, "I'm not sure anyone is asking me for advice. What I would say is 'get some more money in the hands of the poor'."

Banerjee also said he was planning to write an opinion piece praising the increase in corporate taxes in the budget but stopped as it was withdrawn. "Taxing the rich has very little to do with growth," Banerjee stated. "The US was growing fastest between 1945 and 1975. The highest tax rate was under 95 percent under Eisenhower, who was a Republican.  There's no evidence that high taxes discourage growth. If you had more revenues, you could redistribute to the poor."

"I have not welcomed corporate tax cuts. I was going to write a piece saying 'please don't cut taxes, this is what every country does and nothing happens to growth. I was very happy when the government raised taxes in the Budget'. Taxes do nothing for investments. Tax cuts only put money in the hands of the rich, who keep it," Banerjee stated.

Banerjee, speaking on politics, said India definitely needs a stronger Opposition and that it would be good for democracy in India. "People feel Congress isn't ready to take that burden," he added.

Banerjee, speaking of the 2019 elections Lok Sabha elections and the popularity of the prime minister, said, "Any government does a hundred things. Mostly, the people voted for Modi who is genuinely popular, and I'm willing to give him that. The public decided no other leader was worth voting for."

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