The School of Economics, University of Hyderabad (UoH) organized a guest lecture titled “COVID-19 and Macroeconomic Policies” by Prof. Lekha Chakraborty, Professor at the National Institute of Public Finance and Policy (NIPFP), New Delhi on July 5, 2021.
Prof. Lekha Chakraborty before delivering the talk spoke about the progress made over the years by the School of Economics and gave a background of the talk to the audience explaining how policy uncertainties persist in times of economic contraction.
Prof. Lekha while delivering her talk said about the fiscal policy aspect and highlighted how Olivier Blanchard’s ‘growth rate vs interest rate’ policy has been followed in this year’s budget by the Government of India (GoI). She also put out some important constraints that hamper GoI’s fiscal stimulus packages and brought out the contrast between targeted transfers and a huge stimulus in the context of a rising Fiscal Deficit. She added that, it would be more prudent to use the public debt in creating capital assets and scaling up public health infrastructure (which demands serious attention).
Moving on to the monetary policy aspect, Prof. Lekha added how the Reserve Bank of India (RBI) has been trying to reduce repo rate and smoothen the monetary policy transmission mechanism and that a phase of fiscal re-dominance is emerging. While concluding the talk, Prof. Lekha said that flagging concerns about disinvestment policies, usage of public debt and revenue transfers between Centre and States and there needs to be a serious thought on rising inequality as well.
Before concluding the talk the floor was opened to questions from the students and audience on various issues ranging from financing of cash transfers to raise demand to government’s perspective on policies to whether indirect taxation could aid in financing debt and whether quality of deficit matters. It left more interesting questions for the students to research on such as redefining the fiscal route and whether cash transfers lead to more demand or result in precautionary savings and what sort of stimulus packages can be framed to improve the situation of the economy, indicating the talk was not only well received but left the audience more informed about the dynamics of macroeconomic policy making under uncertainties such as COVID19.
Earlier Prof. Ramana Murthy, Dean, School of Economics welcomed the speaker, Dr. Krishna Reddy Chittedi who was the coordinator gave the audience an introduction about the speaker and highlighted her pioneering work in Gender Budgeting and concluded with his remarks while Ms. Divya Archana, MA Student proposed vote of thanks which was attended by 140 participants.
The above talk can be heard on the below given link: