On a more serious note, Banerjee described the meeting with Modi as “cordial” and “good”. “The PM was kind enough to give me quite a lot of time and to talk a lot about his way of thinking about India, that was unique,” he said. He added that while “one hears about policies, one rarely hears about the thinking behind them”.
The two also spoke about the various aspects of governance. The emphasis was on “the structure of elite control over the process of governance”, that runs the risk of making the government less responsive. “He (Modi) very nicely explained how he’s trying to reform the bureaucracy to make it more responsive…,” the economist said, adding it’s important for India to have a bureaucracy that lives on the ground.
While claiming that he wouldn’t get into controversial turf, Banerjee termed the banking crisis in the country as “critical and frightening”. While pointing out that there’s need to worry, he said, “We need some important and aggressive changes”. He argued for reducing the government stake in public sector banks to below 50 per cent, so that there’s no interference from the Central Vigilance Commission (CVC). Even as checks and balances are needed, CVC was allowing a rot in public sector banks, he said.
Banerjee and Duflo have been in India for the past few days to promote their book Good Economics for Hard Times: Better Answers to Our Biggest Problems.
A professor at the US’ Massachusetts Institute of Technology, Banerjee has said in his recent interviews that a cut in corporation tax rate might not boost demand. He has been advocating increasing the tax on the rich and making cash available for the poor to improve consumption at the time of an economic slowdown.
Some politicians in the current dispensation have been critical of Banerjee. Recently, Commerce Minister Piyush Goyal said Banerjee had a Left-leaning mindset and that his views had already been rejected by India. Some others in the ruling Bharatiya Janata Party had made personal remarks on Banerjee. To that he had reacted saying he was upset with such personal comments.
Against that backdrop, Banerjee’s meeting with the PM was seen as significant.
Even as he has opposed the corporation tax rate cut as a way to boost economy, Banerjee has said that many other things that the current government has done, including many of its welfare schemes for the poor, are in the right spirit.
Banerjee and Duflo have been awarded Nobel for their work on randomised controlled trials, or RCT—an experimental approach to alleviate global poverty.