Another lockdown may be devastating: Raghuram Rajan

India needs to open up its economy in a “measured way” and “as fast as possible” so that people start having jobs, millions of which have been lost due to the COVID-19 outbreak, former Reserve Bank of India Governor Raghuram Rajan said.

In an interaction with former Congress President Rahul Gandhi, Rajan said India needed to be “cleverer” in opening up the economy and handling fresh COVID-19 infections quickly without having to go for a “second or a third lockdown”, which would be a “devastating” option.

“It is all too easy to cover a lockdown forever, but obviously that is unsustainable for the economy,” Rajan said, adding that zero infections at the end of the lockdown would be an unachievable target.

The interaction was the first of a series of conversations of Gandhi with global and Indian thought leaders the Congress has initiated to make a renewed bid to present the former Congress President as an alternative to Prime Minister Narendra Modi.

“India will need a budget of Rs 65,000 crore to help the poor. India should do this,” Rajan said when asked how much money would be required to help the poor.

Asked how India could use the crisis to its benefit, Rajan said there was an opportunity for India to shape the dialogue for a rethink on the global economy.

“If there is opportunity for India, it is in shaping that dialogue. Being more of a leader in that dialogue because it is not one of the two big warring parties, but it is a big enough country to have its voice heard in the global economy,” Rajan said.

He said India can also find opportunities for its industries, for its supply chains, but most importantly, “We can try and mould the dialogue towards one which has greater place for more countries in the global order, a multi polar global order rather than a single or a bipolar global order.”

Rajan also raised concerns on the current COVID-19 testing rate in India, contending that it was nowhere close to the US, which now has the highest number of coronavirus cases.

However, given the limited resources in India, Rajan suggested mass testing as an option to reduce the burden on the test infrastructure and to try and vet much more.

“In some sense less intensive, but we have to be cleverer since we simply cannot wait till we have that kind of testing,” Rajan said.