GDP growth slowdown ‘is a very serious concern’, Nobel laureate Abhijit Banerjee tells CNBC-TV18

Indian-American economist Abhijit Banerjee on Monday told news channel CNBC-TV18 that the decline in Gross Domestic Product growth rate, which slipped to 5% in the April to June quarter, was a big concern.

“I think it is a worry, it is a very serious concern,” Banerjee said. “The general trickle down is going to slow down, partly. More importantly, one of the key channels of transmission of income from the urban growth centers to the rural places, where income isn’t directly growing so much, has come to real estate and real estate is right now in a crisis.”

The Nobel laureate pointed out that a huge part of unskilled labour jobs were in real estate. “When construction goes down and brick kilns go down, the transmission of urban growth to rural areas just stops,” he added.

Banerjee said he was awarded the Nobel Prize in Economics along with Esther Duflo and Michael Kremer for their work on figuring out why particular interventions succeed in alleviating poverty, and some do not. “We were the kind of people who pushed it [the work] when nobody else was doing it,” the economist added.

Banerjee said the government should conduct pilot studies and evaluate poverty alleviation policies before implementing them. He said there was a willingness in India to announce new policies because they “sound good” or have a political purpose.

Asked to point out government programmes that were working without any problem, Banerjee said the Mahatma Gandhi National Rural Employment Guarantee Act was functioning well. Banerjee said MNREGA raised wages without forcing people to work bad jobs. He added that the rural roads programmes of the government had been effective as they had made it much easier for people to migrate for jobs.

The Nobel laureate said many government schoolteachers were overpaid even as only five to seven children attend these schools.

Responding to a question on poverty in India, the economist said the poverty rate was declining till at least 2012-’13 but the progress slowed down by 2016. Banerjee added that he was not aware of the most recent data on poverty.

Banerjee was among a group of economists and social scientists who, in March, urged the Narendra Modi-led central government to restore the integrity of statistical organisations, saying their national and global reputation was “at stake”. In a statement, the group of 108 people said it was time for “all professional economists, statisticians, [and] independent researchers in policy” to come together to “raise their voice against the tendency to suppress uncomfortable data”. Esther Duflo was also among the signatories.

Last week, six Nobel prizes in medicine, physics, chemistry, literature and peace were announced.

PM Modi, Rahul Gandhi congratulate Banerjee

Meanwhile, Prime Minister Narendra Modi congratulated Banerjee. “Congratulations to Abhijit Banerjee on being conferred the 2019 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel,” he tweeted. “He has made notable contributions in the field of poverty alleviation. I also congratulate Esther Duflo and Michael Kremer for winning the prestigious Nobel.”

Congress leader Rahul Gandhi also congratulated Banerjee. “Abhijit helped conceptualise NYAY that had the power to destroy poverty and boost the Indian economy,” Gandhi tweeted. “Instead we now have Modinomics, that is destroying the economy and boosting poverty.”

Bharatiya Janata Party Information Technology department chief Amit Malviya lashed out at Gandhi. “Here is PM Modi congratulating Abhijit Banerjee without any ifs and buts despite knowing that he has been a critic,” Malviya tweeted. “And Rahul Gandhi is not only politicising Abhijit’s Nobel Prize but also using it to attack PM Modi. I know it is tough but will Rahul ever learn to be graceful?”

The Congress congratulated Banerjee. “Congratulations to Abhijit Banerjee for winning the Nobel Prize 2019,” it tweeted. “His incredible work in poverty alleviation has made our country proud. The renowned economist was a key consultant for the path-breaking NYAY programme presented by the Congress party.”

West Bengal BJP chief Dilip Ghosh also praised the economist. “Congratulations to Abhijit Binayak Bandopadhyay for securing the prestigious Nobel in Economics,” Ghosh tweeted. “Another feather added to the cap and to Bengal’s crowning glory.”

Banerjee’s alma mater, Presidency University in Kolkata, Jawaharlal Nehru University in New Delhi, and Kolkata’s South Point School also praised Banerjee, PTI reported.

“The entire family of Presidency feels immensely proud of Banerjee,” said university Registrar Debajyoti Konar . “Banerjee had been a member of our mentor group and has always offered us valuable suggestions about the economics department ... Whenever he visits Kolkata he makes it a point to visit his alma mater with which he is still associated.”

Jawaharlal Nehru University Professor Anjan Mukherjee, who taught Banerjee, said he had sent him a congratulatory mail. “He was a very good student, among the best we have taught,” Mukherjee said. “We always expected that he would go far and he did.”

South Point School spokesperson Krishna Damani said the news would make students happy. “The students of South Point will be thrilled when they will think Banerjee had walked on the same corridor, and took notes from the same blackboard as a student of the school,” he said.

However, former Union Minister and BJP leader Anantkumar Hegde criticised the decision to give the prize to Banerjee, citing his role in developing Rahul Gandhi’s economic agenda. “Yes, the man who recommended inflation and tax rates to be raised for our country via Pappu has been recognised and awarded Nobel Prize 2019,” he tweeted. “Pappu can really feel proud of his NYAY proponent while the poor nation missed out the benefits!”

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