Helicopter Money to revive Indian Economy from COVID-19 crisis

Recently, Telangana Chief Minister K. Chandrashekar Rao has suggested RBI to adopt the concept of Helicopter Money to help state governments tide over the current crisis and kick start economic activity in India. It is aimed to rising concerns over economic crisis that has been triggered by the COVID-19 lockdown.

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The term Helicopter Money was given by American Economist Milton Friedman in his famous “The Optimum Quantity of Money”. By definition, Helicopter Money is a monetary policy tool for Quantitative Easing (QE), which aims at “unexpectedly dumping money onto a struggling economy with the intention to shock it out of a deep slump.”It is basically extension of non-repayable money transfer from the central bank to the state and central governments, to infuse liquidity in the system.