India needs better opposition: Nobel laureate Abhijit Banerjee

Stressing on the importance of a good opposition, noted economist and Nobel laureate Abhijit Banerjee on Sunday said India needs a better opposition and only then, the government can work properly.

Speaking to media on the sidelines of Jaipur Literature Festival, Banerjee said that a strong opposition is the heart of any democracy and the ruling party should embrace that to keep it under check.

Asked if he could have won the Nobel Prize based in India, he said, “I don’t think so, I would have been able to win a Nobel Prize if he were based in India, "Well it's not that there is lack of good talent in India but it lacks a certain kind of system needed to recognise the talent".

The Indian-American innovative MIT economist who along with his wife Esther Duflo and Harvard professor Michael Kremer jointly won the 2019 Nobel Economics Prize “for their experimental approach to alleviating global poverty” said that Poverty, like cancer, is many problems.

"In our country, some people are education poor and some are heath poor and some asset poor. All we need is to figure out what is missing". Banerjee went on adding that people living in abysmal poverty should be encouraged by giving them assets and freebies.

Banerjee pointed out the importance of devolution of power and decentralisation for economic success.

"Take China, it has on the ground democracy even though it is such an authoritarianism set up. They introduced village elections 20 years ago. The elected leaders go to different places. The intra-province competition is intense. There is a devolution of power. China is much more decentralised than India despite its ruling Communist Party being such a centralised force," he said.

On the issue of giving the poor money, assets and freebies, Benerjee said, "There is so much prejudice about the abilities of the poor. Give the very poor some asset. Not lend, but give them an asset. Maybe a cow, some goats or trinkets to sell, then you look at what happens to these people after 10 years. They will be 25 per cent richer, they will be healthier and happier. It encourages them to keep trying and they work harder than the people who didn't get the assets."

Reacting to the present economic slowdown in the country, Banerjee said that financial sector is under the biggest stress and government should work on demand deficit because people have lack of trust in the economy that will it kick up or not.

He also spoke on the banking sector, saying that, "We are in a deep cycle. It will take some time to fix things, particularly the banking sector. We don't have the money to do what China did which was to put the money in the banking sector, write off the loans. We cannot really afford that right now," he said.

Answering a question on whether he would accept the post of Reserve Bank of India (RBI) Governor if it was offered to him, Banerjee said, “I will not accept the post. Because to be an RBI governor, one better needs to be a macroeconomist.”

However, he said that at MIT, where he is based, he is lucky to have the world’s best potential PhD students and loves to do the work in collaboration.

"I benefited enormously from a place (MIT) where I had the world's best potential PhD students. And that is important. All this work that I am taking credit for is mostly done by others.

"My students, collaborators, and friends and that is what makes it valuable. It is not that there is a dearth of talent here, but bringing together people on a large scale changes it. It is hard to do it alone," he said.

Born in Mumbai, Abhijit Banerjee was educated at the University of Calcutta and Jawaharlal Nehru University. He received his PhD from Harvard University and is a professor at the Massachusetts Institute of Technology (MIT).

(With inputs from PTI)