‘Greatest Emergency Since Independence,’ Says Ex-RBI Governor Raghuram Rajan on Coronavirus

News Delhi: Former Reserve Bank of India (RBI) governor Raghuram Rajan has called coronavirus India’s biggest emergency since lockdown, also remarking that if the government was going to do everything from the Prime Minister’s Office (PMO), it would be doing ‘too little and too late.’ Also Read – Raghuram Rajan’s Advice on Coronavirus: ‘Fight The Epidemic First, Worry About Stimulus Later’

Writing in a blog post on his LinkedIn account, Rajan said that spending on the poor is the right thing to do even though the government’s resources are strained.

“While our country’s limited fiscal resources are certainly a worry, spending on the needy is the right thing to do as a humane nation, as well as a contribution in our fight against the virus,” he wrote, adding that this, however, doesn’t mean that budgetary constraints can be ignored, especially given that the country’s revenues will also be severely affected this year.

“We entered this crisis with a huge fiscal deficit, and will have to spend yet more,” the blogpost further stated.

On a plan for the post-lockdown scenario, Rajan, who was the 23rd governor of the RBI, wrote that the need of the hour is to ensure that the poor and non-salaried lower-middle class, who are prevented from working from longer periods, can survive.

“We have already seen a consequence of not doing so-the movement of the migrant labour. Another will be people defying the lockdown if they cannot get back to work,” he wrote.

He called the 2008-09 global financial crisis a ‘massive demand shock,’ but said that the country’s workers could still go to work, firms were coming off years of strong growth, the financial system was largely sound, and government finances were healthy.

Writing that the immediate priority is to contain the spread of the pandemic, he also called the ongoing three week-long nationwide lockdown a first step that buys India time to improve its preparedness. He, however, also stated that it will hard to lock down the entire country for a much longer period.

Finally, he also recommended the government to reach out to members of the opposition, who have had the experience of managing a crisis situation.