The media would like to extract anti-Modi quotes from you – that's how Prime Minister Narendra Modi warned the Nobel laureate economist Abhijit Banerjee during their meeting on Tuesday.
Banerjee described his interaction with Modi a “unique experience” and praised the centre's Ayushman Bharat programme, but he also strongly advocated reduction of the government equity in public sector banks in order to do away with the fear psychosis among the bankers and restart the lending cycle.
“The Prime Minister started by cracking a joke about how the media is trying to trap me into saying anti-Modi things. He has been watching TV; he has been watching you guys; he knows what you are trying to do,” he said when asked to comment on his one-on-one talk with Modi.
Soon after the Nobel laureate economist met Modi at his Lok Kalyan Marg residence, the Prime Minister tweeted, “Excellent meeting with Nobel Laureate Abhijit Banerjee. His passion towards human empowerment is clearly visible. We had a healthy and extensive interaction on various subjects. India is proud of his accomplishments. Wishing him the very best for his future endeavours.”
Modi's appreciation comes days after one of his Cabinet colleagues – Commerce and Railways Minister Piyush Goyal – scoffed at the scholar, dismissing him as a “Left-leaning economist” whose ideas had been rejected by the people.
Banerjee spoke in support of the Modicare in which a family insurance cover of Rs 5 lakh is being provided to 10.74 crore families from the poor and marginalised section of the society.
“Its very much needed. It deals with the fact that healthcare expenses wipe entire families out. We need to find ways so that families don't lose all their assets when somebody in the family gets sick. It serves a very important gap in our economic structure," he said at a press conference here.
The developmental economist from Massachusetts Institute of Technology, who won the coveted prize along with his wife Esther Duflo (also working at MIT) and Michael Kremer (Harvard University) argued in favour of reducing the government stakes in public sector banks, which in turn will lessen the grip of the Central Vigilance Commission and help the banks get rid of the fear psychosis.
“The banking system is paralysed by fear of investigations. It leads to hiding of defaults which creates bigger problems. I want the government to have less equity in banks. So that this fear psychosis in the banking sector is removed,” he added.
“We should seriously be thinking about reducing the equity share of the government in many public sector banks below 50% so that the central vigilance commission doesn't regulate. If the government owns more than 50% of the equity then the CVC is empowered to investigate every individual default and that is a paralysing fact for bankers.”
Banerjee made these comments when asked about the banking crisis in India. Responding to a Lok Sabha query in last December, the Union Finance Ministry said that the total volume of non-performing assets of the scheduled commercial banks stood at Rs 9,46,062 crore as on September 30, 2018.