Union Budget 2020: Won't Endorse Fiscal Tightening, Says Abhijit Banerjee Amid Reports of Rs 3,000 Crore Cut in School Education Budget
Nobel lauearte and globally renowned Indian economist Abhijit Banerjee. (Photo Credit: Getty Images)

Kolkata, January 11: Nobel laureate and globally renowned Indian economist Abhijit Banerjee on Saturday opined that the cut in school education budget by Rs 3000 crore is like a "drop in the ocean". Banerjee even stated that India is close to a tipping point of a major recession.

Expressing his opinion on the Centre's reported plan to cut school education budget by Rs 3000 crore, the Nobel Prize Winner for Economic said, as quoted by news agency ANI, "The federal government provides very little of the funding in education. Education is a state subject, and it is mostly funded by state. Cutting Rs 3000 Cr is like a drop in the ocean."

Adding more, Banerjee alleged that Union government had breached the fiscal deficit by a huge margin and it won't be a big deal if it breaches it little more. He said, "Fiscal deficit has been breached by a huge margin already. In that sense, I don't think that it's a big deal to breach it more. I wouldn't be supporting fiscal tightening right now." Year Ender 2019: From Abhijit Banerjee's Nobel Prize in Economics to Ravish Kumar's Ramon Magsaysay in Journalism, Personalities Who Made India Proud.

Here's ANI tweets:

Earlier this week, while speaking at the Indian Express’s Express Adda along with co-owner of Nobel Prize and his wife Esther Duflo, Banerjee compared India's economic condition with that in 1991. He mentioned that exports are shrinking, imports are shrinking, investments are not happening and GDP growth rate had declined below five percent. Though this statement, he also attacked the current Union Finance Minister Nirmala Sitharaman for slashing the corporate taxes to 22 percent from 30 percent.

It is to be known that National Statistical Office data -- released this week -- estimated the growth in real GDP during FY 2019-20 at five percent as compared to 6.8 percent in FY 2018-19. The worsening factor too rose with World Bank projecting India's GDP to decelerate further below five percent in FY 2019-20 amid economic crisis. However, the World Bank report expects that the country's GDP was likely to recover to 5.8 percent in FY 2020-21.