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Transfer Rs 1,000 to each Indian per month: Abhijit Banerjee and Esther Duflo suggest Centre

Esther Duflo said India was already in a position to start universal basic income quickly as it had the Jan Dhan accounts-Aadhaar-mobile system in place.

May 25, 2020 / 09:54 AM IST
Representative image: Reuters

Representative image: Reuters

Nobel Laureates Abhijit Banerjee and Esther Duflo have said that India should immediately begin cash transfers of Rs 1,000 per person every month as universal basic income (UBI) to bypass the economic crisis caused by the novel coronavirus pandemic.

The duo also said that India should implement the ‘one-nation, one ration card’ scheme urgently.

During an interaction with the virtual version of the Jaipur Literature Fest on May 24, As per Banerjee, India can help in the mass production of the COVID-19 vaccine, whenever it is developed. However, he cautioned that, in the absence of a vaccine, India is likely to see another lockdown as cases are still rising.

“Rs 1,000 per person per month would make a huge difference, that's probably too much. Even Rs 500, so for a family of five Rs 2,500, I think that makes a big difference. It would pay for all the emergency things,” The Economic Times quoted Banerjee as saying.

“India is going to face a massive demand shock so pumping money in the hands of people might actually be the way to save the economy,” Banerjee added.

COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Duflo expressed that India was already in a position to start UBI quickly as it had the Jan Dhan accounts-Aadhaar-mobile system in place.

Banerjee also appreciated the Centre’s efforts of providing ‘one nation, one ration card’. However, he added that the scheme must be implemented urgently.

Earlier, in conversation with Congress leader Rahul Gandhi, former Reserve Bank of India (RBI) governor Raghuram Rajan said that India needed Rs 65,000 crore to help the poor during the lockdown. Considering India’s total Gross Domestic Product (GDP), it can afford to do that, Rajan said.

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Moneycontrol News
first published: May 25, 2020 09:54 am

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