New Delhi: Nobel laureate Abhijit Banerjee said that the country could be going through a phase of recession, and there is ‘nothing in the data’ that suggests otherwise.
While addressing the Kolkata Literary Meet, Banerjee also said that the priority of the government should be on refinancing the banking sector, which is in “doldrums”.
“What I can say is that we could be in a recession. But, I don’t know by how much. There is nothing in the data that suggests we could not be in a recession,” Banerjee said.
He also advocated the imposition of wealth tax and more redistribution.
“Given the current state of inequality in India, a wealth tax is completely sensible. In such a case, more redistribution is required, and I expect this not to happen soon,” Banerjee said.
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The 58-year-old Indian-American economist said the banking and infrastructure sectors were in need of funding from the government.
“The banking sector is in the doldrums. It needs huge funding by the government. The Centre should also look at infrastructure sector funding,” he said.
Talking about the informal sector, the Nobel laureate said there is no reliable data on it. “The statistical apparatus is incapable of capturing short-term data on the informal sector.”
Banerjee also favoured the central government’s move to privatise PSUs like Air India.
On the recent cut in corporate taxes by the government, he said, “It seems the corporate sector is sitting on huge cash”.
(With agencies input)