Covid-19 impact: Kaushik Basu details three steps for gradual opening of the economy

Our Bureau Mumbai | Updated on April 06, 2020 Published on April 06, 2020

Kaushik Basu, former Chief Economic Adviser to Government of India

India’s former Chief Economic Adviser says that testing should be expanded vastly to get economy moving

While social distancing and lockdowns are a must in tackling the Coronavirus outbreak, we also have to slowly allow trade, exchange and markets to function to prevent a sharp currency depreciation and a breakdown in food and essential supplies, said Kaushik Basu, Professor of Economics at the Cornell University, US, and former Chief Economic Adviser to Government of India.

Basu took to micro-blogging platform Twitter on Monday to detail the three steps for gradual opening of the economy.

Testing should be expanded vastly, he said, as this will get the economy moving. Planes will have to now leave alternate seats empty and passengers have to come two hours early and have their medical check-up done, said Basu.

Direct support is essential at least in the short term, he said. “Along with cash supplements, the poor will need direct support with food, healthcare and basic needs. If shortages appear, prices will rise and the poor, even with cash handouts, will get outcompeted,” he explained.

Basu said that financial support has to be given to small businesses to encourage them to not layoff their workers. “This will no doubt expand the fiscal deficit, but that is a short-run cost we have to take. We can begin to correct the deficit next year,” he said.

Basu also added that doing health check-ups for all passengers before a flight is not absurd. “A few decades ago, if you (had) said all passengers would have to do security checks, many would have said that is absurd. If the state gives incentives to a few big pharma and airline companies, it can be done,” he pointed out.

Published on April 06, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.