Abhijit Banerjee, the joint recipient of the 2019 Nobel Memorial Prize in Economic Sciences, said that India needs to address the slow pace of disinvestment of public assets, stating that the country should look at disinvesting many more assets at a much faster pace.
While he feels that the Indian government doesn't have ample control over the fall in value of the rupee, he did point out circumstances under which India can possibly enter a recession.
Speaking exclusively to CNBC-TV18 on the sidelines of an event in Delhi, Banerjee said that it is obvious that India will be staring at a recession if global interest rates are very high and there's no demand for its indigenous products.
In view of India's inelastic demand for energy, he added that the possibility of recession would increase if the Russia-Ukraine War continues and Russia cuts supply of energy.
He explained that when the US goes on to recession, it has always been the case that the dollar appreciates compared to other currencies, stating that the world interest rates will go up as things slow down. However, he pointed out that though India escaped the impact of a slowdown in 2008, he doubts that the country will be able to escape it this time.
