India needs 2 million COVID-19 tests daily to be confident, Rajan tells Rahul

Rajan said India needs to be clever about testing, and carry out mass testing

Rahul Rajan Rahul Gandhi (left) and Raghuram Rajan during their videoconference | Congress

Eminent economist Raghuram Rajan believes that India needs to spare at least Rs 65,000 crore to support the poor who have been worst affected by the COVID-19 pandemic and the measures taken to control it. Moreover, Rajan stressed upon opening up in a measured way as fast as possible as the country does not have the capacity to support people across the spectrum for too long.

“We will need Rs 65,000 crore (to protect the poor). It is actually not so much. After all, our GDP is Rs 200 lakh crore. In that, Rs 65,000 crore is not much. We can do it. It is for the poor, to save their lives; hence we should do it,” Rajan said.

The former governor of the Reserve Bank of India was speaking in a web-enabled conversation with ex-Congress president Rahul Gandhi on Thursday on the impact of COVID-19 on the country and the steps that are needed to be taken to protect the people and revive the economy.

Rajan said it was incumbent upon the government to now realise the benefits of direct cash transfer to the people and support those without a livelihood while the uncertainty is on. “As a priority, we have to keep people alive and prevent them from going out on the streets looking for food. We have to help as many of these people as we can through money and through the PDS system,” he said.

In the discussion, which mainly involved Rahul posing questions to Rajan on the prevailing situation and the way out of it, the economist, in response to a query on the massive job loss that was expected as a result of the pandemic, agreed that the numbers are really worrying, with more than a 100 million people pulled out of work. In this context, he said that it was important that the country opened up in a measured way as fast as possible. “We do not have the capacity to support the people across the spectrum for too long. We are a relatively poor country,” he said.

On the economic impact of COVID-19, Rajan said it was imperative to keep the economy together “so that when we reopen, it will be able to walk off the sick bed.” In this, he said, a certain prioritisation would be required as the resources are limited.

Asked whether the current crisis held any strategic benefit that India could accrue, Rajan said the country should aim at shaping the global dialogue that would follow in the capacity of a world leader. He also said that India could find opportunities for its industries in the post-COVID-19 scenario.

“These kinds of incidents rarely have positive effects for any country, in general. But there are ways countries can take advantage. There will have to be a rethink of everything in the global economy. There is an opportunity for us to shape the dialogue and be a leader in that dialogue. In this situation, India can find opportunity for its industries, for its supply chain,” he said.

With regard to testing, Rajan said that India would require 2 million tests a day to get to the level of confidence that was being talked about in the US. He said India needs to be clever about testing, and carry out mass testing to get over the challenge posed by population. “Do mass testing of say a thousand samples. If you find something, then go deeper and do more tests. There are ways of testing, which reduce the burden on the testing infrastructure,” he said.

The discussion took note of issues such as centralisation of power and decision-making, inequality in Indian society manifesting itself in the current crisis and also divisions coming up even during the pandemic.

Rajan, who was at the receiving end of questions for most part of the conversation, asked Rahul as they discussed centralisation of power what he felt about the impact on the Panchayati Raj system. Rahul said, “I am sorry to say that there is a huge effect on it and it is in retreat. We are now moving back to a PM-based or a bureaucrat-based structure. It you look at the southern states, they are doing a better job since they are more decentralised. The northern states, which are more centralised, are not doing so well.”

The Congress leader was also asked by Rajan on how he thought the scenario in India was different from the US and Europe. Rahul said while the scale of the problem was different to begin with, inequality in the Indian society made the situation completely different. “The inequality and the nature of the inequality... Things like caste. The way Indian society is structured, it is different from American society. A lot of these problems are different in different states... One blanket solution for the whole of India cannot work,” he said.

On the issue of inequality, Rajan said it was important to have ways of making the lives of the people at the bottom of the pyramid better. “In terms of challenges, there is certainly an administrative challenge involved in reaching everywhere. The greater challenge is in the range between the lower middle class and the middle class. We need good-quality jobs, so that people are not dependent on government jobs,” he said.

This was the first in the series of conversations that Rahul is scheduled to have with global and Indian thought leaders on the COVID-19 crisis and the way forward. Rahul, who had retreated from the political centre stage after resigning as Congress president following the Lok Sabha election debacle, has been extremely vocal on the situation emerging as a result of the pandemic and has led his party in articulating what needs to be done to deal with the virus and its impact on the people and the economy.