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Express e-Adda LIVE updates: This is the pralay of Hindu mythology, says Arvind Subramanian

Express e-Adda LIVE updates: As Covid-19 pushes the economy into a recession, Subramanian is speaking on the immediate and medium-term challenges facing the economy, the policy options before leaders, and the trade-offs there in.




Former Chief Economic Advisor Arvind Subramanian on Tuesday is the chief guest at the Express Adda, which is being hosted by The Indian Express online for the first time. Subramanian said India should plan for negative growth rates in this financial year.

“For developing countries like India, the trade off between lockdown and economic activity should be different from developed countries. This is the pralay of Hindu mythology,” he said.

Besides discussing the contours of a prudent yet compassionate macro-economic policy framework, Subramanian also spoke on the immediate and medium-term challenges facing the economy, the policy options before leaders, and the trade-offs there in.

He has had first-hand experience with ideating and framing key structural reforms — from introduction of Goods and Services Tax to the Direct Benefit Transfer scheme — during his term as CEA in the Ministry of Finance.

He will be in conversation in the Express Adda webinar with Harish Damodaran, National Editor, and P Vaidyanathan Iyer, Executive Editor (National Affairs).

Arvind Subramanian, chief guest at Express e-Adda, speaks on challenges facing the economy due to coronavirus lockdown. Follow LIVE updates here

On the issue of migrant workers, former Chief Economic Advisor Arvind Subramanian said their access to cash will be limited. “This is the time when people need cash. We should not be reluctant to pump out cash and should be given in people’s hands,” he says. Subramanian says RBI has lowered rates and made liquidity available but what we need is actual credit flowing to the corporate sector, including small and medium firms.

Former Chief Economic Advisor Arvind Subramanian says for the Indian economy to bounce back quickly, a stimilus package not less than 5 per cent of GDP is required. “There is a huge overhang of liquidity in the market already. There will be a deflationary shock. Prices will be lower than higher. This is the pralay of Hindu mythology,” he says. Subramanian says our food stocks are turning out to be equitable social safety net. Normally, there are two social safety nets — food and cash.

Former Chief Economic Advisor Arvind Subramanian says one month of GDP may be lost for countries due to the lockdown. “IMF forescast for India are mystifying and bizarre. We should plan for negative growth rates in this financial year,” he says.

Former Chief Economic Advisor Arvind Subramanian says the world and India is facing an unusual crisis. For developing countries like India, the trade off between lockdown and economic activity should be different from developed countries. “India should prioritise livelihoods. A comprehensive and ramped up testing should be the priority for India,” he says.

Welcome to our live blog. In today’s Express Adda, which will be hosted by The Indian Express online for the first time, former Chief Economic Advisor Arvind Subramanian is the chief guest. At a time when the economy has taken a hit due to the nationwide coronavirus lockdown, Subramanian will likely  reflect on the immediate and medium-term challenges facing the economy, the policy options before leaders, and the trade-offs there in.

Ex-CEA Arvind Subramanian at the Idea Exchange. (Express Photo/File)

The Express Adda is a series of informal interactions organised by The Indian Express Group and features those at the centre of change. Among the recent guests were Finance Minister Nirmala Sitharaman, Nobel laureates Abhijit Banerjee and Esther Duflo, Chief Economic Advisor Krishnamurthy Subramanian, former UK Deputy Prime Minister Nick Clegg, author and political thinker Ashis Nandy, Carnatic musician T M Krishna, cancer specialist and Pulitzer Prize-winning author Dr Siddhartha Mukherjee, and cricketer Cheteshwar Pujara.

A non-resident Senior Fellow at the Peterson Institute for International Economics and a Visiting Lecturer in Public Policy at Harvard University’s Kennedy School of Government, Subramanian’s presence couldn’t have been more timely as the government discusses a fresh fiscal relief package for the economy and the Reserve Bank of India (RBI) continues with a series of measures to inject liquidity into the financial system.

With International Monetary Fund, World Bank and other leading institutions projecting the world economy to enter into a recession, Subramanian’s experience as a former policy maker and leading thinker would help in expanding the knowledge base on ways to mitigate and minimise the hardships imposed by COVID-19.

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