Poverty was 40 per cent in 1990, and now, it is less than 20 per cent: Abhijit Banerjee
Laying stress on the need of a strong opposition, Nobel Prize winner economist Abhijit Banerjee on Sunday said parties opposed to Modi government were "disunited" and have not been able to create pressure that comes from "a stable opposition".
"There would be no pressure on the government to deliver in absence of a good Opposition. The government does whatever it thinks is right. It is a wrong situation. Democracy works well where there is strong opposition," Dr Banerjee told reporters here at Jaipur Literature Festival.
"They are disunited and there are many factions... So the pressure which is there for a stable opposition that pressure has not yet been created," he said.
Dr Banerjee, an Indian-origin economist, was jointly awarded the Nobel Prize in Economic Sciences along with his French-American wife Esther Duflo and American economist Michael Kremer "for their experimental approach to alleviating global poverty last year.
He said that there is a huge reduction in poverty in India in the last 30 years.
"Poverty was 40 per cent in 1990, and now, it is less than 20 per cent. Since the population has grown, it is an enormous reduction in the number of poor people," he added.
Asked whether demonetization has its effects on the Indian economy today, Dr Banerjee said it was harsh on the informal sector because there was a cash economy.
He said there was demand shortage which started in 2016 and whether it was due to demonetisation or other factors is hard to say.
The economist said there are some good indicators for the Indian economy in the last two months but the finance sector was of concern.
"We have been witnessing some good indicators for the Indian economy for the last two months. But I cannot say how long will they last as fresh data is coming," he said.
"Finance sector is something we should worry about. The banking sector is stressed. The government is not in a position to bail it out. We know that there is a deficit in demand and cars are not selling. These facts are signs of a general fact that people lack confidence," Dr Banerjee said.