Hyderabad, Jan 26 (PTI) Nobel laureate Abhijit Banerjee on Monday said the fall in funding by the Centre in the V B G RAM G that replaced MGNREGA may make the poorer states to spend less.

"I think the thing about G RAM G that worries me is that the fraction of federal funding is being reduced. The fraction of federal funding being reduced means that it's already true that the poorer states do less. That was always the problem with NREGA," he said speaking at the Hyderabad Literary Festival (HLF).

The poorer states spending less on the scheme would not help the cause of reducing poverty, he said.

"Now that the incentives are created so that the poorer states are even less able to do it. That doesn't seem to serve the purpose of fighting poverty," he said.

He felt that the bill has not yet "settled" and might change as there is fair amount of pushback even from "people in the ruling party" (BJP), adding that he would not like to take a position on the issue yet till he sees where it goes.

According to the Centre, the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) scheme, which has replaced Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, aims to establish a rural development framework aligned with the national vision of 'Viksit Bharat 2047'.

Banerjee participated in two sessions of the HLF and also spoke to reporters on the sidelines of the event.

Asked about India emerging as the fourth-largest economy trailing only behind the US, China and Germany, Banerjee hinted that the emphasis should be more on per capita income than on the country emerging as the fourth-largest economy.

"This number completely (I) find uninteresting from the point of view of welfare. Because, it's not per capita. We have 1.4 billion people. Germany has one twentieth of the population (compared to India). I don't find it a useful number," he told reporters.

On the coming Union Budget and any prescriptions for the nation's economy, Banerjee said it is also necessary to think about how to organise the government to be more effective.

Asked how he saw India handling the tariffs imposed by the US, he said India is trying very hard and also letting the rupee depreciate as a countermeasure.

Banerjee also favoured devolution of power to the states and transfer of power to local governments to ensure that democracy is much closer to the people.

He said there is a disparity in the number of Lok Sabha seats vis a vis country's population, resulting in Lok Sabha members not being able to do much for people as the constituencies are too big.

Observing that consumption of rice is high, the Nobel laureate felt that people should move away from rice to eating healthier grains.

"Then there is global warming and that's going to have consequences for what you can grow. There is, I think, a huge amount of water loss in Punjab. Punjab should stop growing rice," he said.

He replied in the affirmative when asked if some protein should be given free along with rice to counter "protein starvation" among the population in the country. PTI SJR GDK KH