Rajan said that it is all too easy to cover a lockdown forever, but obviously that is unsustainable for the economy
Raghuram Rajan
Former Reserve Bank of India (RBI) Governor Raghuram Rajan on Thursday said that unemployment numbers are really worrying and India needs to be "cleverer" about lifting the lockdown. Rajan's remarks came during his interaction with Congress leader Rahul Gandhi, via video conference, on the economic crisis due to ongoing lockdown which is scheduled to end on May 3. "The numbers are really worrying. If you look at CMIE, virtually another 100 million more people have been put out of work as a result of COVID. 50 million through unemployment and 60 million through leaving the labour force," he said while responding to Rahul's query that India has a high level of unemployment, that is now going to be massive.
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"I think it says, we need to open up in a measured way but as fast as possible so that people start having jobs. We don't have the capacity to support people across the spectrum for too long. Being a relatively poor country, people start out with significantly lower reserves," he said. "But we have to be cleverer about opening up. Perhaps do mass testing. Take a mass sample, say 1000 samples and check in mass, if there is any sign of the virus in those mass samples. If you do find it, then go deeper into the sample and check who it might be. This way it would reduce the burden on our test infrastructure and can allow us to try and vet much more. We have to be cleverer since we simply cannot wait till we have that kind of testing," the economist said.
Rajan said that it is all too easy to cover a lockdown forever, but obviously that is unsustainable for the economy. On the opening of the economy, he said: "It has to be sequencing. First, places where you can maintain distancing. It is not just distancing in the workplaces, but also distancing to and fro, from the workplace."
"So, a lot of work needs to be done both on creating the structures, as well as ensuring that the workplace is relatively safe. As well as ensuring that if there are accidents, if there are fresh cases, how do we isolate quickly without having to go to a second or a third lockdown? Those will be devastating if we have to go there," he added.
When asked about finances of the agricultural sector and the workers, migrant workers, Rajan said that the government should to find ways of getting both money as well as food through PDS to as many of these people.
"This is where the efforts we have made in Direct benefits transfer (DBT) need to be realised at this point. All the ways we transfer to relatively poor people, we need to take a call on that. We have different ways of accessing - through widow pensions, MGNREGA Rolls. And we need to say that look these are people who don't have a job, who don't have a livelihood and for the next 3-4 months while the uncertainty is on, we are going to support them," he said.
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