Nobel Laureate asked India to print more money and not to worry about inflation

[Darker45]

~snip~

Me too I think it is a bad idea to print more money because it will mean so much  money in circulation. This is what causes inflation. If there is more money and India does not have a strong fiscal policy it will mess up the economy and Indians will be the ones to suffer at the end.

Printing more money per se is not that bad. Especially if it is done as an extreme measure to something that is extremely urgent such as what is currently happening to almost all countries. Also, it is being done all around the world. This is not peculiar to India. For as long as it is well-managed, I believe it will do more good than bad.

This is not the only thing that causes inflation. There are so many factors that cause inflation. And, most importantly, inflation is actually not to be fully avoided. It is designed to be there. It should be there, albeit closely managed. 

The problem is that printing money has gone to something we do in extraordinary circumstances to a standard tactic, governments now print a lot of money for no reason at all

Yeah, I bet they do. Well, that has always been the downside of fiat, and in the hands of some people with questionable integrity.

and now when printing money could be used as a way to stimulate the economy to get off this difficult circumstances they find out this could damage the economy as well, if this crisis last for a lot longer I am not so sure the economic system will survive and probably a big reform will come during the next years.

Printing money out of thin air is one standard economic stimulus, but it is not everyday that we need it. It is not everyday that we are facing a hard economic struggle. That is basically a drastic measure that is much needed in dire times. Yes, it may hurt the economy in the long run, but that could really be needed in times like these. After all, that economic long-term negative effect could be remedied. In the meantime, the majority of the populace do not have food on the table and are not allowed to work either; that is valid enough reason to print more money.

[Betwrong]

There is not enough money in the world to help out the poor if you never did that before to begin with. Would Sweden be capable of helping out everyone including companies and every single person during this time of need?

Well, of course they would be capable of doing that, however they were always a social democracy to begin with and they are quite happy to be like that and they are getting help, now they need bigger but they at least had a base to start working with.

Other nations including India and even the bigger ones like usa or uk do not have that because they are full of politicians who are only thinking with their pockets and not their hearts, so to begin now would be way too late and wouldn't be possible because they spent all the taxes on useless stuff to get more money into their pockets to begin with. Hence why printing money is the solution. Also do not consider all money printing with Zimbabwe, USA has been creating more money out of thin air all the time and nothing really happened to them all that bad.

Exactly. And that is because USD is accepted everywhere(even in North Korea most people would be happy if paid with USD). I think the US could "print out" up to $5 trillion, and no one would notice. India, however, is not in this postilion. So they should do it cautiously, in order to not end up like Zimbabwe. And I think they can do it successfully, if they will follow the Abhijeet Banerjee's advices. The thing is that in countries like Zimbabwe the newly printed money go to the rich as a matter of priority, but Banerjee is suggesting to transfer it to the poor.

[Sadlife]

When banking institution tells you not worry about money printing then that's the time you should be very worried. Because when they print money their not really making value. They're just stealing value from other units already in circulation to buy stuff like corporate debt, bonds and soon stocks. Look at how most money has loss so much value over time affecting the economy increasing the price of products.

[TheGreatPython]

There are levels between being like USA and being like Zimbabwe, if your money doesn't worth anything you could be like Zimbabwe and I realize that but Indian money is not worthless neither, people actually use it around the world for either purchasing something from India, or tourism to go there and vacation (and I think it is an amazing place to visit) and most importantly people give their own money to buy Indian labor from the people and get service in return, which those people turn into Indian fiat and use in their regular lives.

So, India may not be like USA at all, nobody is like USA they are maybe rivaled by only China and nobody else, however that doesn't mean that Indian economy is not strong around the world neither, they are doing pretty fine, not awesome but decent enough.

[shield132]

Nobel Laureate Abhijeet Banerjee has recently asked India to print more money and transfer them to the poor class of people to increase demand in the market to tackle upcoming recession post COVID-19.

Reference: https://m.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262

A lot of economists will say it is a bad idea because later it will become very difficult to arrest inflation rate. But increasing the demand is a major challenge as well.

Voice your opinion! Will be good or bad step for a diverse country like India?

Is there any other choice right now? Everyone knows how poor country India is (while keeping second place in world's population ranking) and how people live there.
In india there are some tallented programmers and I know it they do 2000$ job for 50-100$ just to live and survive. When you put such country in lockdown, it's another death verdict. At least you can develop immune system against coronavirus but you have no choice when you are left in front of hunger.
So for this reason if they want to still continue lockdown and get rid of excessive death caused by hunger, then they have to print money to just escape now. But what may happen in future... In any way inflation will cause a bad scenario.

[abhiseshakana]

There are levels between being like USA and being like Zimbabwe, if your money doesn't worth anything you could be like Zimbabwe and I realize that but Indian money is not worthless neither, people actually use it around the world for either purchasing something from India, or tourism to go there and vacation (and I think it is an amazing place to visit) and most importantly people give their own money to buy Indian labor from the people and get service in return, which those people turn into Indian fiat and use in their regular lives.

So, India may not be like USA at all, nobody is like USA they are maybe rivaled by only China and nobody else, however that doesn't mean that Indian economy is not strong around the world neither, they are doing pretty fine, not awesome but decent enough.

India is a country that has a consistent state platform to become a regional power. proven by India to increase its military power and its foreign policy is more inclined towards America. Modi is great at reading opportunities even now India is a strategic partner of the United States. The United States will build India as America did China in the 90s. India will be used as a proxy by the Americans to fight China in Asia.

This opportunity can be exploited by India to overtake corners before the Americans start looking for trouble with India. It could be because usually, initially, China was also a copycat country tracing how America built its dynamic infrastructure first and then the static infrastructure. After that China made modifications and innovations and improvisations. India can imitate Germany which prints money for weapons of war, or imitates China printing money for means of production or imitates Japan printing money to overcome deflation or follow America to print money to perpetuate its dominance.

[mu_enrico]

print more money and transfer them to the poor class of people to increase demand in the market

But sir, if the number of poor class people in India is huge, then the gov must print lots of money! It's not the same as the US if you look at the poverty rate and financial strength.

Moreover, money should be used to move the economy by giving incentives to businesses and tax holidays, not for charity purposes.

[exstasie]

India will be next to turn on the money printer. In a televised address tonight, Modi announced a $266 billion stimulus package.

He said the plan would be unveiled by his finance minister in the next few days. Not many details are available yet on either the funding or spending side, but economists expect it'll be paid for with bond issuance, direct overseas borrowing, and RBI spending. That means a weaker rupee.

https://www.ft.com/content/5734f333-e4d7-4ebf-9de2-220e537da3f0

[abhiseshakana]

India will be next to turn on the money printer. In a televised address tonight, Modi announced a $266 billion stimulus package.

He said the plan would be unveiled by his finance minister in the next few days. Not many details are available yet on either the funding or spending side, but economists expect it'll be paid for with bond issuance, direct overseas borrowing, and RBI spending. That means a weaker rupee.

https://www.ft.com/content/5734f333-e4d7-4ebf-9de2-220e537da3f0

Ideas and pressures for printing money are not only happening in India but this discourse is also being debated in Indonesia. Between the two camps, the technocrats were chaired by the Minister of Finance and the camp of politicians. But the final decision remains with the President, which is printing project-based money or printing money by issuing bonds.

Pro technocrats means there are political consequences that arise such as coalition splits and loss of political support for the president whereas if winning the camp of politicians there is a possibility that a country will lose the trust of the international world even the Minister of Finance can resign.

[saifoufa]

Nobel Laureate Abhijeet Banerjee has recently asked India to print more money and transfer them to the poor class of people to increase demand in the market to tackle upcoming recession post COVID-19.
Reference: https://m.telegraphindia.com/business/abhijit-banerjee-offers-print-money-pill/cid/1763262
A lot of economists will say it is a bad idea because later it will become very difficult to arrest inflation rate. But increasing the demand is a major challenge as well.
Voice your opinion! Will be good or bad step for a diverse country like India?

I would say it is a good step for most countries out there.
Because what does govs by printing more money is actually taking away some value from every money out there a little bit and then give this whole amount to some certain type of people.
In case of US it is an adequate decision to give 'em out to literally every US citizen just because there are foreign holders out there who will suffer the most.
In case of India it is a good decision because if they're going to give out to poor class of people then the rich people are going to suffer (which is not that big of deal - they're going to get their money back from their businesses after surge in demand)