Another round of lockdown will be devastating: Rajan

A second or third round of lockdown will be devastating for the Indian economy, former RBI governor Raghuram Rajan said today. In conversation with former Congress president Rahul Gandhi, the former Reserve Bank of India governor talked about the state of the economy and India should revive it in the midst of the coronavirus pandemic."India needs to be cleverer about reopening the economy," Rajan noted. If the country faces a surge of cases after the government lifts the restrictions then questions will arise on how successful the lockdown was, he said, which might push the country into another lockdown. This would then diminish credibility and confidence of the government.Rajan also said that it was “all too easy to have a lockdown forever, but that would not be sustainable for the economy,” as he pushed for more measures by the government to combat the virus.The noted economist pegged the cost of bringing the economy back to life at Rs 65,000 crore, saying that out of India's Rs 2 lakh crore GDP, this amount is minuscule. On how India can use the crisis to its benefit, Rajan said, "It is very rare for a country to remain unscathed in such a pandemic. But India can mould the dialogue in the global order."Testing, he feels, is where India's biggest weakness lies. India will need to triple its testing capacity. The country will need to conduct about 2 million tests a day to get USA's confidence of opening up the economy, 'and we are no way near that', Rajan warned.

from Economic Times https://ift.tt/2yUqfmM