India

Time to reintroduce wealth tax in Budget, says Abhijit Banerjee

Time to reintroduce wealth tax in Budget, says Abhijit Banerjee
Abhijit Bannerjee at the Kolkata Literary Meet on Monday. (Express photo by Partha Paul)

Nobel laureate Abhijit Banerjee on Monday said that the country could be passing through a phase of recession. Addressing the gathering at the Kolkata Literary Meet, the economist also said the priority of the government should be on refinancing the banking sector.

“What I can say is that we could be in a recession. But, I don’t know by how much. There is nothing in the data that suggests we could not be in a recession,” said Baneejee.

Considering the current stage of inequality in the country, the Nobel laureate said it is time for India to reintroduce wealth tax in the Union Budget 2020 and also focus on redistribution of wealth.

“Given the current state of inequality in India, a wealth tax is completely sensible. In such a case, more redistribution is required, and I expect this not to happen soon,” Banerjee said.

The economist said banking and infrastructure sectors were in need of funding from the government. “The banking sector is in doldrums. It needs huge funding by the government. The Centre should also look at infrastructure sector funding,” he said.

Banerjee, however, said that refinancing the banking sector will not yield results in the near future, rather will take time.

Talking about the informal sector, the Nobel laureate said, “The statistical apparatus is incapable of capturing short-term data on the informal sector.”

On the recent cut in corporate taxes by the government, he said, “It seems the corporate sector is sitting on huge cash”.

Banerjee also favoured the central government’s move to privatise PSUs like Air India. Responding to a question about his views on the Centre’s disinvestment drive, Banerjee said, “I would love to sell out the prestigious PSUs.”

Speaking on government programmes, he said, “The Centre has undertaken very expensive new schemes like Ayushmann Bharat, which once properly implemented will address some key welfare issues.”

Earlier in the day, Nobel laureate Abhijit Banerjee on Monday said he’s hopeful his acclaimed Randomised Control Trail (RCT) experiment could help sportspersons perform at their best. Last year, Banerjee, Esther Duflo and Michael Kremer won the Nobel Prize for Economics Sciences for their work on RCT — an experiment to test effectiveness by treating two groups differently.