India Could Be Passing Through Recession: Economist Abhijit Banerjee
Abhijit Banerjee, winner of the Nobel Prize for economics, listens during an interview in New Delhi, India. (Photographer: T. Narayan/Bloomberg)

India Could Be Passing Through Recession: Economist Abhijit Banerjee

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Nobel laureate and economist Abhijit Banerjee has said India could be passing through a phase of recession, and there is "nothing in the data" that suggests otherwise.

Banerjee, during an address at the Kolkata Literary Meet, also said the priority of the government should be on refinancing the banking sector, which is in "doldrums".

“What I can say is 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.

The author of 'Good Economics for Hard Times’ also advocated 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.

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 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."

Also read: Fitch Cuts India GDP Growth Forecast To 4.6% In FY20

Banerjee also favoured the central government's move to privatise public sector units like Air India Ltd. "It seems the corporate sector is sitting on huge cash," he said on the recent cut in corporate taxes by the government.

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