Fiscal deficit target breached, won't advise tightening: Abhijit Banerjee

Abhijit Banerjee won 2019 Sveriges Riksbank Prize in Economic Sciences

Ahead of the upcoming Union budget, Nobel laureate Prof Abhijit Banerjee on Saturday said that he would not support "fiscal tightening right now."

"Fiscal deficit has been breached by a huge margin already. In that sense, I do not think that it is a big deal to breach it more. I would not be supporting fiscal tightening right now," Banerjee said at a press conference here.

Reacting to questions about the Centre planning to cut approximately Rs 3,000 crore from the education budget, Banerjee said that it would not have much of an impact as education is a state subject.

"To be honest, the federal govt provides very less fund for education as education is a state subject. Union government cutting Rs 3000 crores from the education budget is actually like a drop in the ocean as it is controlled by the state," Banerjee said.

"I think we should focus on doing more with the resources we have, our teachers are paid among the highest in the world relative to the GDP per capita, therefore we should be getting them to perform better," he added.

The Union Budget will be presented by Union Finance Minister Nirmala Sitharaman in February 2020.

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