Nobel laureate Abhijit Banerjee has said that there is no certainty that India will gain from shifting of businesses from China in the wake of the coronavirus pandemic.
Speaking to a Bengali news channel ABP Ananda on Monday evening, Banerjee said that everyone is blaming China for the Covid-19 outbreak as it has origin there. "China is being blamed now for the coronavirus outbreak. Even people are saying that India stands to benefit as businesses will shift from China and come to India. But that may not be true," the economist said.
Banerjee, who is also a member of the Global Advisory Board formed by the West Bengal government to prepare a roadmap for Covid-19 response in the state, said, "What happens if China depreciates its currency. In that case, Chinese products will be cheaper and people will continue to buy their products".
Talking about the proportion of Gross Domestic Product (GDP) planned to be spent by the Centre for a relief package, Banerjee said countries like the US, UK and Japan are spending a high share of their respective GDPs. "India plans to spend less than one per cent of its GDP at Rs 1.70 trillion. We should spend a much-increased proportion of GDP," he said.
The Centre had announced a more than Rs 1.70 trillion package to alleviate the hardship of the poor hit by economic disruption due to coronavirus outbreak. The Economics Nobel Prize winner said that the main problem is that people of the country do not have high purchasing power.
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