‘Don’t Skimp on the Poor’: Banerjee, Rajan, Sen on Migrant Crisis

The three economists have also suggested issuing temporary ration cards, perhaps for six months.

‘Don’t skimp on the poor,’ write economists Abhijit Banerjee, Raghuram Rajan, and Amartya Sen on the migrant crisis.

(Photo: The Quint/Kamran Akhter)

“As it becomes evident that the lockdown will go on for quite a while, the biggest worry is that a huge number of people will be pushed into dire poverty or even starvation due to lack of livelihoods and delayed standard delivery mechanisms,” Amartya Sen, Raghuram Rajan and Abhijit Banerjee stated in a column in The Indian Express on Thursday, 16 April.

The COVID-9 lockdown and thereby the extension of the same has shown us that the poor, the vulnerable are always hit the hardest, and the country needs comprehensive policies to address that. Rajan, a former RBI Governor, Sen and Banerjee, both Nobel laureate in economics, have put forward areas that we need to focus on.

“We need to do what it takes to reassure people that the society does care and that their minimum well-being should be secure,” they said.

Speaking about the stocks of food at the Food Corporation of India, they stated that India stood at 77 million tons in March 2020, higher than ever at that time of the year, and more than three times the “buffer stock norms.”

The government has been unusually active in buying the stocks that the farmers need to do away with. "Giving away some of the existing stock, at a time of national emergency, makes perfect sense; any sensible public accounting system should not portray it as inordinately costly," they wrote.

Additionally, they said, the government has offered a supplementary PDS provision of 5 kg per person per month for the coming three months.

They added, “It is quite likely that three months will not be enough, since even if the lockdown ends soon, the process of reopening the economy will take time. More importantly, a substantial fraction of the poor are excluded from the PDS rolls, for one reason or another.”

‘Issue Temporary Ration Cards’

Case in point, they said, is the small state of Jharkhand where, they are told, there are seven lakh pending applications for ration cards.

As a solution to this, they said, "Issue temporary ration cards – perhaps for six months – with minimal checks to everyone who wants one and is willing to stand in line to collect their card and their monthly allocations. The cost of missing many of those who are in dire need vastly exceeds the social cost of letting in some who could perhaps do without it."

This, they said, will have a number of ramifications, such as:

• First, the government must expand the PDS, set up public canteens for migrants among other measures to ensure that every means at its disposal is used so that no one is left starving.
• Second, the unexpected loss of income and savings can have serious consequences, even if the meals are secured for now. The farmers need money to buy seeds and fertilizer for the next planting season, shopkeepers need to decide how they will fill their shelves again, hence these concerns must not be ignored.

They further stated that Congress leader P Chidambaram's idea of using the MGNREGA rolls from 2019, plus those covered by Jan Arogya and Ujjwala to identify the poor households and then send Rs 5,000 to their Jan Dhan accounts, seems like a good first step.

“If there was ever a challenge that requires brave and imaginative action, this has to be it. We need to spend wisely given the enormous likely demand for fiscal resources in the coming months, but skimping on helping the truly needy is the surest way to lose the plot,” they concluded.

(With inputs from The Indian Express)