Nobel laureate economist Abhijit Banerjee was at the Kerala Literature Festival held in Kozhikode from January 22-25, where on the final day he addressed a packed audience on the economics of food, hunger and welfare. Just before his session began, Banerjee sat down with The Wire on the sidelines for a wide-ranging conversation beyond the festival themes. From jobless growth and rising inequality to data failures and democratic risks, Banerjee – co-founder and co-director, with Esther Duflo, of the Abdul Latif Jameel Poverty Action Lab (J-PAL), an MIT based global research centre that focuses on poverty alleviation strategies – spoke candidly about what India’s economic debates often miss and his recent move from the United States to Europe. Edited excerpts:How should we frame the debate around welfare versus so-called freebies economically and ethically in India?I find this conversation extraordinarily one-sided. We are perfectly happy to give enormous benefits to the rich, and we never measure those. Nobody measures the tax breaks, land transfers, the regulatory loopholes we create for the rich, or the government contracts that flow to a few selected companies. Those are handed out right and left.Including wonderful roads for the middle class…I have no problem with the government building good roads for the middle class. But the idea that the poor are the primary beneficiaries of government spending rests on never calculating what actually goes to the rich.Leave aside roads, schools and public goods. Just take the specific tax breaks for new investments, the various “Make in India” credits, and compare that volume of money to what is spent on so-called freebies. You’ll get a much more realistic perspective on this subject.How worried should we be about the absence of an idea of redistribution in our politics?Hugely worried. What’s happening now isn’t just about redistribution – it’s about social stability. We’re in a situation where even the middle classes are not catching up with the rich and the ultra-rich. That creates resentment among the middle class and, over time, concentrates power among the ultra-rich.You can see the consequences clearly in the United States: oligarchic control of government and rather broad coalition of the elites which is explicitly anti-democratic and somewhat… or quite racist.We see something similar in Indian politics – especially in the northern states – except that there doesn’t seem to be resentment brewing as a result. In fact, the opposite: elections are won on elitist and divisive platforms.India has very complicated elections. The opposition miserably fails to unite, and that failure isn’t entirely accidental, for the ruling party encourages certain divisions – that’s their job.The bigger problem is that the opposition doesn’t understand how its own bread is buttered. Look at the Bombay municipal elections. The outcome would have been very different if the opposition had stayed together, and it didn’t.How do global shocks – US President Donald Trump and his tariffs – impact everyday economic realities in India?One thing that gets very little attention is how many factories here are really struggling. The media in India rarely does primary reporting.One of the signs that we are under pressure is the exchange rate. The exchange rate has gone down a lot. The way we are trying to deal with the tariff is by, in a sense, lowering the exchange rate and then the rupee price of things effectively doesn’t transfer into dollar prices and then creates a wedge.There’s nothing astounding about that. But when I talk to business owners, they tell me weaker firms are struggling to survive – and many won’t. We’re so bad at documenting this that we’ll only find out [the scale of the damage] five years from now.A decade ago there was a push for better data on small industries – real data, not projections. Without it, are we guessing in the dark?We are guessing in the dark. Also, the government has used the fact that their data does not always look like the rest of the picture [it wants to paint about the country]. They sometimes withhold the data. What they have not decided to do is put resources behind independent data gathering.What you need to get good data is to put a top set of people there and give them the license to go and collect the best quality data and say that whatever you collect will be published. Instead, you get controversies like NFHS-5 [a highly-regarded demographer was penalised and data withheld after the fifth round of the National Family Health Survey revealed uncomfortable truths].That doesnt encourage good people to take the job of trying to improve data quality, because if in the end I’m going to be fired for producing the “wrong” number, then I won’t do it. Trump did exactly this in the US – he fired the BLS chief [Bureau of Labour Statistics Commissioner Dr Erika McEntarfer] over unemployment numbers – because she had the “wrong” number.Is there any trend that gives you hope about India? And is there something we are missing that is genuinely dangerous?What’s missing – and what worries me most – is the explosion of inequality and what it means for democracy. The level of inequality today is extraordinary.Is that something you observe personally, or does the data show it?Both. You see it in the data – GDP moving in one direction, while average incomes in National Sample Survey data move in the opposite direction [falling household savings, rising family debt]. And, more importantly, it shows up in many other ways. You go to malls around the world and see young Indians spending enormous sums. In my own neighborhood, I see 18-year-olds buying extremely expensive things. It’s bound to create resentment. It always has.Also read: Indian Household Debt Growing Twice as Fast as Assets, RBI Data Analysis ShowsIs it that India’s growth is no longer linked to employment – or are even the growth numbers wrong?Growth is not linked to employment. We’ve had jobless growth for a long time, and we’ve known this for years. The obsession with growth rates means almost nothing.We argue endlessly about whether growth is 8.45% or 8.25%, even though the underlying data – especially on small industries – is so poor that these numbers are largely projections. We simply don’t know.The obsession with growth is really about national pride. Growth has become a marker of prestige, though it doesn’t generate employment – at least not formal employment. It hasn’t for a long time.Tell me about your move to Europe – not just what prompted it, but also whether we should expect a very different kind of economics from you?I’ll answer the second part first. I don’t think much will change. I’m too old to do something entirely different, and I have no plans to reinvent myself. There’s also no expectation that I would.In our area, we’re surrounded by a number of younger people – by younger, I mean under 45 – whom we’ve known for a long time. We’ve mentored them and had connections with them for years. So in many ways, we’re moving from one stable, familiar environment to another. We’ve been reasonably consistent in what we do for about 30 years now, and I don’t expect that to change.Is America trying to pull you back?No. They might – but I don’t think there was any expectation that we were leaving. When we did leave, there may have been a bit of a gasp, but we have stayed connected. I’m keeping my job half-time at MIT for at least the next seven years.I’m keeping the position because of J-PAL, which is headquartered at MIT. We started it, and it’s really at the heart of what we do. So we don’t have much of an option – we have to keep running it.