India among worst performing economies in world; stimulus inadequate, says Abhijit Banerjee

Nobel Laureate Abhijit Banerjee on Tuesday said India is among the worst-performing economies in the world and the government's economic stimulus was inadequate to tackle the problem.

He, however, said that the country will see a revival in growth in the July-September quarter of the current fiscal.

Speaking at a virtual event, Banerjee said the country's economic growth was slowing down even before the Covid-19 pandemic hit.

"Indian economy is among the worst-performing in the world. The country's economy will see revival in the current quarter (July-September)," he said, adding that economic growth in 2021 is going to be better than this year.

Banerjee, currently a professor at Massachusetts Institute of Technology (MIT), said he does not think that India's economic stimulus was adequate.

"India's economic stimulus was limited. It was a bank bailout. I think we could have done more," he said.

The stimulus measures "did not increase consumption spending of lower-income people as the government was not willing to put money in the hands of the low-income population," he noted.

Talking about inflation, Banerjee said India's growth strategy was a closed economy with the government creating lots of demand, which resulted in high growth and inflation.

"India had 20 years of high inflation and high growth. The country benefited a lot from stable high inflation in the last 20 years," he opined.

The eminent economist noted that India needs to be globally more competitive.